By U.S. Rep. Barbara Comstock (R-VA-10)
Last month marked the end of a 32-year old outdated complicated tax code. In December, Congress passed the first major tax reform in a generation. Modernizing and updating our tax code has been a top priority for me in order to grow our economy, put more money into the pockets of our hardworking taxpayers, and give all of our citizens upward mobility on the path toward living the American Dream and increasing our national prosperity for all.
“The Tax Cut and Jobs Act” that we passed in Congress in December met that test and is already having a positive impact on our businesses and families:
- 90% of families are getting tax cuts due to lower tax brackets across the board and a doubling of the standard deduction while maintaining the mortgage deduction;
- A doubling of the child tax credit from $1,000 to $2,000 puts more money into the pockets of families with children and the threshold for taking the child tax credit increased dramatically up the income scale to include most families with children in the 10thDistrict. The child tax credit is also refundable for low-income families and the Earned Income Tax Credit was preserved – both of these provisions reward work;
- Over 5.5million Americans have already received bonuses from their employers following its passage.
According to a review done by the nonpartisan Ferguson Group that works for Loudoun County, a Loudoun family of four earning $150,000 and residing in a house worth $535,000 would save $1,798. Joint Filers with zero children, earning $150,000 in the same $535,000 home would save $516. A single filer with one child in a condo worth $343,500 would save $823.
For tens of millions of Americans and tens of thousands of residents in the 10th District of Virginia, they are seeing the good news of raises, bonuses, increased 401k contributions and more in their own pockets following the passage of The Tax Cuts and Jobs Act. Just a few examples from a variety of employers:
- Apple— $2,500 in employee bonuses in the form of restricted stock units. They will also spend $30 billion in additional capital expenditures over five years; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing Apple is also paying $38 BILLION in taxes on cash it had been keeping overseas. $38 BILLION.
- Information First, Inc. in Manassas, Virginia — $500 cash bonus for all 15 employees.
- Starbucks— $500 stock grants for all Starbucks retail employees, $2,000 stock grants for store managers, and varying plant and support center employee stock grants, totaling more than $100 million in stock grants; 8,000 new retail jobs and 500 new manufacturing jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.
- Thermo Fisher Scientificwith a plant in Middletown — $500 bonuses for 68,000 non-executive employees; increased charitable donations
- Waste Management Inc.— $2,000 bonuses to approximately 34,000 employees.
Tax reform legislation is fueling changes to employee compensation and benefits programs across the country, according to a survey by the Willis Towers Watson consulting firm. The average increase in wages from January to March this year is the highest for any three-month period in nearly a decade. And almost 3 million jobs have been created since the last election, including more than 290,000 in the manufacturing sector, which had been losing jobs in the months leading up to the 2016 election.
Two-thirds of those (66%) surveyed are considering making changes to their benefit programs or have already taken action as a result of enactment of the tax bill including: increasing 401(k) contributions (26%); increasing or accelerating pension plan contributions (19%); introducing a profit-sharing or one-time bonus payout to all employees (21%); and increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction or adding a new paid family leave program in accordance with the new Family and Medical Leave Act tax credit written in the tax reform legislation. Already as a result of the Family and Medical Leave Act tax credit, companies like Walmart have expanded their paid family leave from 6 weeks to 10 weeks for new Moms.
According to a recent National Federation of Independent Business survey, a record number of business owners said now was a good time to expand. The new tax law, the report says, “produced the most recent boost to small-business optimism.” U.S. consumer confidence jumped to a 17-year high recently as optimism about employment prospects grew and Americans began seeing additional money in their paychecks from recently enacted tax cuts, according to data from the New York-based Conference Board.
I’ve seen that optimism as I have visited with businesses and our Economic Development offices in each region of the 10th District. In just five months since becoming law, the Tax Cuts and Jobs Act is already creating a better economy. By lowering our business tax rate to be more competitive, reforming our international tax code to encourage the return of overseas jobs and investments, and creating incentives like immediate expensing that encourage businesses to reinvest in American operations and workers – we are getting the economy moving again and providing opportunity across the 10th District and across the country.