We get it. Tax Day isn't Americans' favorite day. For many, Tax Day means complex forms, confusing rules, and a guessing game as to the results. These concerns combined with a new tax law meant a lot of Americans didn't know what to expect when it came time to file.
While no one enjoys handing over their hard-earned money to Uncle Sam, at least this year employees could keep more of that money and Main Street businesses could reinvest more of that money to grow.
Thanks to the Tax Cuts and Jobs Act (TCJA), take-home pay is higher and small businesses are able to reinvest tax cut savings. Here is a snapshot of what tax reform looks like for Americans:
- According to the U.S. Treasury, roughly 90 percent of U.S. workers are receiving more take-home pay due to the TCJA.
- Over 500 U.S. companies have announced employee bonuses, wage hikes, and/or benefit increases.
- Billions of dollars previously kept overseas are now pouring back into the U.S.
- Most small businesses will now be able to deduct 20 percent off their business income in addition to having their taxable income taxed at lower rates.
- Tax reform doubles the child tax credit to $2,000 for each child and expands it to more families across the country.
- Job creators may claim a new tax credit for implementing a paid family leave or medical leave program for their workers.
- Energy costs are down. In response to the TCJA, utility companies across the U.S. have lowered rates by a total of $4.5 billion for 87 million customers.
All year, the U.S. Chamber of Commerce heard stories of how employers used tax cuts to provide bonuses, enrich benefits, and grow their companies. For instance, Mike Zaffaroni, the Jax Chamber Small Business Leader of the Year, thanked us for pushing hard 2-years ago for tax reform. When SBA Administrator, Linda McMahon, visited Mike in Jacksonville last spring, Mike had purchased a new truck with savings he estimated from tax reform. Since then, revenue is up more than 40 percent. "The tax cuts definitely get it right for a business like mine," wrote Zaffaroni. "We continue to reinvest and have recently purchased two more 'tax cut trucks' and our 48th employee (up from 29 before TCJA) starts next week."
It's been a long road to this kind of tax reform and yet, there are still many important areas of focus for tax lobbying with this new Congress. Those areas include passing tax extenders, making a few technical corrections to the TCJA, raising sustainable user fees for infrastructure and transportation projects, and making the small business tax cuts permanent.
This is the first Tax Day I can remember when I can pause to celebrate how TCJA has been good for the country and good for the business community.