What are the common misconceptions of the Tax Cuts and Jobs Act?
MYTH: Tax cuts were disproportionately given to higher wage earners at the expense of lower wage earners.
FACT: The “vast majority” of Americans, including middle-class families, received a tax cut. According to the Joint Committee on Taxation, low-wage workers received a larger tax cut than high-wage earners. The 21 million workers earning between $20,000 to $30,000 per year received a 13.5 percent tax cut while people earning more than $1 million received a 5.9 percent tax cut.
MYTH: Tax cuts only pad the pockets of the richest people and largest corporations, and benefits are not going to hardworking Americans.
FACT: More than 800 American job creators used their tax cut savings to invest in their workers through higher paychecks, bonuses, expanded retirement and parental benefits, tuition assistance, new jobs, and lower utility rates. Workers in the lowest wage distribution range saw their wages grow by 6.5 percent in 2018. The Tax Cuts and Jobs Act also created “Opportunity Zones” to encourage new investments in low-income areas.
MYTH: Tax cuts are not creating jobs or growing paychecks.
FACT: More than 3 million jobs have been created since the Tax Cuts and Jobs Act was signed into law in December 2017. The unemployment rate fell to 3.8 percent in March 2019, establishing a 13-month streak where the unemployment rate was at or below 4 percent. The labor force participation rate rose to 63 percent while the number of job openings in the U.S. outpaces the number of available workers. Additionally, wage growth has been at or above 3 percent for eight straight months.
MYTH: Tax cuts are not leading to economic growth.
FACT: Economic growth climbed to 3 percent in 2018, the fastest fourth quarter to fourth quarter growth since 2005.
MYTH: Tax reform is pushing jobs and companies overseas rather than bringing them back to the United States.
MYTH: Small businesses did not see any relief from the Tax Cuts and Jobs Act, all of the benefits went to big business.
FACT: The Tax Cuts and Jobs Act cut taxes for businesses of all sizes, including small businesses. Allowing for full and immediate expensing of new capital investments is also helping small businesses purchase new equipment or buildings. As a result, small businesses hired new workers at the fastest pace in 45 years and are expressing historic levels of optimism.