Separating fact from fiction on tax reform
Washington, September 10, 2018/UploadedPhotos/HighResolution/62e00b1d-1630-4653-a3b8-9ef6f1685194.jpg
This piece originally appeared in the Cincinnati Enquirer. You can read it here.
I met a young man who had been released from prison and had just re-entered the workforce. “For the first time in my life,” he told me, “I’m a taxpayer.” The pride in his voice was telling of a man who had just found an honest job and a real purpose.
For him, becoming a taxpayer was an amazing thing. He was proud to contribute to the economy with his labor, to contribute to our nation with his tax dollars, and prouder still to be able to support himself.
But these life-changing moments only occur when reliable, good-paying jobs and careers are available. Just a few short years ago these stories were few and far between during the stagnant years following the great recession. Now, due to the economic growth stimulated by tax reform, we’re seeing unemployment plummet, particularly for those who previously sat on the sidelines of U.S. economic progress.
Last week, youth unemployment was recorded at a 52-year low. This is a far-cry from the stories we heard just a few years ago of young people unable to find jobs, about the labor participation rate shrinking, and stagnant income levels.
Since the signing of tax reform, more than one million jobs have been created, bringing claims for unemployment benefits to their lowest level since 1969. For those who previously could not find a job, the booming job market is life-changing.
In fact, American workers are seeing wages rise – 90 percent have seen an increase in their take-home pay. This translates to real money for real people, right here at home: a sports-apparel company I recently visited told me their average wages have gone from about $12 an hour to $16 an hour. The average increase in take-home pay per person in Ohio’s Second District is $1,356 and $2,470 for a family of four. While critics have denounced stories like this as nothing more than “crumbs,” for many of us these crumbs are a vacation, a down payment on a car, or much-needed retirement savings.
These same critics proclaim that tax cuts only help billionaires, to the detriment of the average American. This could not be further from the truth. As pointed out by economist Douglas Holtz-Eakin, "77 percent of the tax cuts go to individuals or pass-through businesses. Getting only 23 percent is hardly 'skewed toward corporations.' Over one-half of the 2019 individual tax cuts, $133 billion, go to those earning under $200,000." In fact under the new tax law, the share of taxes paid by millionaires actually increases from 19.3 percent to 19.8 percent. Moreover, when American companies are doing well, workers are doing well. Just ask one of the four million workers who saw a benefit or pay increase thanks to tax reform.
There are even those who would have us believe that tax reform and this historic job market are unrelated. As a former Cincinnati small business owner who has signed both the front and the back of a paycheck, I know firsthand that if you allow business owners to keep more of their hard-earned money, they will reinvest that money into their businesses. That means hiring more employees and paying those employees a better wage.
Jobs are being created, wages are rising, and the economy is growing because America is a good place to do business once again. Companies that previously stashed money abroad are bringing it back home. Before tax reform, companies moved about $50 billion in earnings abroad every three months. In the first three months of this year, they brought $158 billion back. According to Bloomberg, that’s the biggest reversal on record since 1946.
Critics claim that the sky is falling, but the facts tell a different story: the economy is growing again from the ground up, Americans are going back to work, our nation is again open for business, and revenues are up – maybe we cut spending, pay off some debt, and leave America better than we found her.