|
Dear Friend,
I hope that you and your family are continuing to stay well. As we work to re-grow our economy I wanted to provide a new edition of our Myth vs. Fact, on tax reform.
In 2017, Republicans passed the Tax Cuts and Jobs Act (TCJA), a historic piece of legislation to update our tax code for the first time since 1986. This legislation has kept more money in Americans’ pockets and has helped job creators continue to grow their businesses.
Almost three years later, there is still a refusal amongst many to accept the incredible impact this legislation had on our economy, including:
- 50-year record low unemployment;
- Over 5 million jobs created before the pandemic; and
- Wages for women, minority populations, and youth grew at a faster pace than during the years under the previous administration.
Below I will explain three common myths we hear, and explain the facts for each of them. At the end of the newsletter I have attached a survey to hear from you - please feel welcome to submit your response!
Low and Middle Income Tax Cuts
After passing tax reform, many said the legislation only gave a tax cut for the rich; however, the data is clear that the TCJA actually expanded the portion of taxes the top 20% were paying.
In 2018 and 2019, low- and middle-income families saw the largest gains in wealth growth, according to the Federal Reserve.
- Low-income families saw their net worth increase 37%.
- Middle-class families saw their net worth increase 40%.
Wages for women, minority, and youth populations grew substantially in 2018 and 2019. In 2019, many of our jobs reports were showing record low unemployment for African Americans, Hispanic Americans, and Asian Americans. From 2017 to 2018, Arizonans making $25,000 – $49,999 saw an 11.5% decrease in their federal tax liability, and Arizonans making $50,000 – $74,999 saw a 13.0% decrease in their federal tax liability*.
The booming economy in 2018 and 2019 must be the goal for our recovery. In order to achieve this, we must make these tax cuts permanent, and continue to develop trade deals with other nations, incentivize growth, and help our brothers and sisters safely return to work.
Debt and Deficit Spending
Following passage of the TCJA, many falsely claimed that tax reform was responsible for ballooning our debt and deficit. However, commentators were only simply distracting Americans from the real problem: our government’s continued growth in spending that has set us on a dangerous trajectory.
I have been speaking on the House Floor for years about the need for Congress to address our spending, and find solutions for lowering the cost of healthcare to reduce our debt burden and ensure seniors will always have access to the promises we made as a government. Right now it is projected that without making any changes to current policies, our government will have a $104 trillion budget deficit by 2050.
The tax cuts were an asset for our economic growth leading up to the pandemic. Now we need to focus on how we can reign in government spending while ensuring our seniors are supported during their retirement.
Corporate Taxes
There are many headlines that claim corporations aren’t paying taxes, but this is false - the corporate tax rate is 21%, still higher than many other countries around the world.
Tax reform reduced the corporate tax rate from 35% to 21%, helping our nation’s businesses become more competitive with the rest of the world by investing in their employees, equipment, and innovation. This reduction also helped bring back many of the jobs that moved overseas under the previous administration.
Many of my democratic colleagues believe that repealing these tax cuts and increasing the corporate tax rate again would help our economy, but in actuality it would undo TCJA’s progress by leading to less jobs, lower wages, and fewer American businesses thriving as we saw before 2016 and the COVID19 pandemic.
We want to hear from you!
We are glad to hear so many of you have enjoyed these Myth vs. Facts. There is an unfortunate amount of disinformation spread across our country, so I want to ask you what topics you would be interested in us reviewing for a Myth vs. Fact. Please leave your suggestions here:
I appreciate you taking the time to read my weekly e-newsletter. If our office can ever be helpful for you, please don’t hesitate to reach out to us.
Sincerely,
.jpg "Updated_Signature_(2).jpg")
David Schweikert
* According to IRS data compiled by Americans for Tax Reform
|