For those who waited until the last minute to file their taxes, they can take solace in the fact that Tax Day on Tuesday marked the end of the old tax code, which was outdated, confusing, and —most importantly — took too much of hardworking Americans’ hard-earned money.
Because Republicans passed legislation late last year to provide long overdue tax relief to ordinary Americans, starting next year, filing taxes will be simpler and less burdensome.
The vast majority of Americans don’t have to wait. The IRS already updated its tax withholding tables, so employees across the country have begun to reap the benefits. According to the Tax Policy Center, over 90 percent of middle class Americans will get a tax cut this year — to the tune of about $2,000 for a median family.
Contrary to the talking points put forth by Democrats, none of whom voted for tax relief, these tax cuts amount to real savings for those who need them most. They are enough in most cases to cover utility, phone, internet, gas or cable bills for the year. They could also pay for a summer family vacation.
These tax cuts certainly aren’t “crumbs” as House Minority Leader Nancy Pelosi has repeatedly claimed. Well, they might be crumbs for Pelosi, who is the fifth richest person in Congress, with a net worth of $43.5 million, according to the Center for Responsible Politics.
On Saturday morning, I’m attending an event in Richmond hosted by the Job Creators Network to celebrate how tax cuts work.
And the celebration extends far beyond just less federal tax withholding, as welcome as that is. According to Americans for Tax Reform, over 500 companies are directing part of their tax cut savings to their combined four million employees in the form of higher compensation. These include some of Virginia’s biggest and best known employers such as CarMax, Altria, Walmart, Lowe’s, Home Depot, and AT&T.
Small businesses are also big winners under the new code. They receive a new 20 percent tax deduction on their earnings. This will allow them to keep more of their earnings to pay down debts, improve or expand their operations, and reward their employees. Given that small businesses are the backbone of the economy, this is a benefit that extends far beyond Main Street.
Taken together, these tax cuts will have a major impact on the local economies in Virginia and across the country. Billions of tax dollars will remain at home to be spent on local priorities. This is money that otherwise would have headed north on I-95 to be spent by those who believe they know how to spend your money better than you do.
As a result of this tax cut stimulus, the Congressional Budget Office recently revised its economic growth estimate for the year upwards to 3.3 percent. This would mark the fastest growth rate since 2005 and be over 50 percent higher than the slow-growth Obama years. It’s important to emphasize just what a big difference there is between three percent and two percent economic growth. Because of the marvels of compound interest, at three percent growth, living standards should triple over a standard lifetime. At two percent growth, they will merely double.
Now for the bad news. Democrats want to repeal these tax cuts and raise taxes far higher than even under the old tax code.
Ignoring that the tax cuts actually increased the share of income taxes paid by the rich, they are using class warfare to try to further their tax and spend agenda. (What else is new?)
So in addition to being a celebration, this Tax Day also serves as a reminder about the importance of voters’ choices and the consequences of elections. Voters pocketbooks are on the line.