Weekly Update: The Results Are In - Most Americans Saved Money
Virginians just finished filing their taxes for 2018. And this is the first year that the benefits of the Republican-led Tax Cuts and Jobs Act (TCJA) have improved the lives of our citizens. Over the past year, we have experienced more jobs, historic levels of small business optimism, bigger paychecks, increased business investment, and lower tax liability.
The New York Times recently performed a survey that said that only 40% of Americans believed they had received a tax cut, however in reality, across almost all income groups, most Americans received a tax cut. The New York Times writes, “To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained — and misleading — effort by liberal opponents of the law to brand it as a broad middle-class tax increase.” But facts matter. Ninety percent of middle-class taxpayers are getting a tax cut, according to the Tax Policy Center.
The results speak for themselves here. Through lower tax rates, higher standard deductions and larger child tax credits, Americans have reaped the benefits and are better off.
According to recent data released by H&R Block, an accounting firm, their clients saw their taxes decline by 24.9% on average. As the company explained, average tax refunds are up just 1.4% for their customers because 96% of the reduction "went into paychecks during the year." The company also reported that their customers in every state saw their tax liability decrease.
The TJCA didn’t stop with just allowing Americans to keep more of their hard-earned money, it spurred strong, sustainable economic growth.
Business and consumer optimism has returned at record numbers. The tax cuts and capital investment deduction have been a boost for America’s manufacturers, leading to record high manufacturer optimism in 2018. The TCJA also provided much needed tax relief for America’s small businesses by letting certain pass through entities (i.e. sole proprietorships, partnerships, LLCs and S corporations) deduct 20 percent of their qualified business income.
Americans are now returning to the workforce. Workforce participation among prime-age workers stands near its highest level in almost a decade, and for the first time since at least 2001, there are more job openings than Americans looking for work. During March 2019, the economy added nearly 200,000 jobs across various industries, exceeding economists’ expectations and the unemployment rate has held at a steady 3.8%, a near 50-year low. In addition, last month marked the 102nd consecutive month that the economy experienced job gains.
I am extremely proud to be a part of this effort that has been beneficial to so many Americans. Even with a simpler tax code, Tax Day is a headache. However, as long as families and small businesses are put in control of their money over Washington, the U.S. economy will continue prosper. I will continue to fight for policies that empower consumers and promote a strong economy.