Rest assured, the tax reform bill recently passed will be extremely good news for Robeson County and the entire country. You will begin to see your take-home pay increase in February. Unfortunately, some of the media, U.S. senators, and Congress members have spread fake news and fake statements, misleading the American public. After deriding the legislation for weeks, CBS News recently came clean and realized that every real couple they profiled would actually see a tax decrease.
The tax reform reduces the tax brackets for individual and corporate taxpayers. If you think about it, if a company has to pay only 20 percent of its profit in tax rather than 30 percent, that 10 percent can be put to other uses. Some will benefit the shareholders, but others will go to the employees, community contributions, and additional investment resulting in increased jobs.
BB&T, for example, has announced that its minimum pay will increase from $12 to $15 and hour, a 25 percent raise. It is also providing $1,200 bonuses to almost 27,000 employees who are not eligible for commission or incentives.. Most of Robeson County’s 550 BB&T employees will get a raise and the bonus. BB&T is also increasing it charitable contributions by more than double the amount of the compensation increases. The bank has always been very generous to Robeson County, so that should mean additional money coming here. Another local employer, CVS, has committed to adding 3,000 full-time jobs as a result of the tax reform.
Dozens of other employers, including AT&T, Royal Hawaiian Heritage Jewelry, Wells Fargo, Comcast, Fifth Third Bank, Rush Enterprises, Melaleuca, Associated Bank and Boeing, have announced similar raises, bonuses, charitable contributions, and job investments. Bloomberg News reported “A Stalled Las Vegas Resort Is Now a Go Thanks to the Tax Overhaul.” This new investment will result in 6,000 full-time resort jobs and 5,000 construction jobs. Because we have had one of the highest corporate tax rates in the world, companies including Apple and Microsoft keep about $3 trillion in other countries. It is expected that they will now bring some of this money back to America, creating jobs here. As many as 340,000 people now out of work may get jobs as a result.
Why would anyone oppose such a positive development for our country? Well, depending on the perspective you take, you could argue that the tax cuts help the wealthy more than the poor. The IRS reported that in 2015, of the 150,493,263 filers, 51,452,534, or 34.2 percent of all filers, did not pay a penny. So, tax cuts don’t help this group, although the legislation does provide additional compensation for them. A more appropriate evaluation shows that the poorest 80 percent of taxpayers currently pays 33 percent of all federal income taxes, but gets 35 percent of the tax cuts. The top 1 percent of Americans now pay 27 percent of all federal taxes, but get 21 percent of the tax cuts. So, the share of taxes paid by the wealthiest Americans will increase. The tax cuts help all income brackets.
Another real benefit for the low and middle class is the repeal of the Obamacare mandate, forcing people to pay healthcare premiums. Some families making $60,000 were required by law to spend nearly half of their income on health insurance or pay a penalty. As I’ve noted previously, the vast majority of people who are paying the penalty rather than signing up for insurance are in the lower income bracket and paid over $3 billion in penalties from their low incomes to avoid having to participate in Obamacare. Now these individuals will no longer have to pay that penalty, putting $3 billion back in the pocket of low-income Americans.
So, look forward to your take-home pay increasing in February and many of your out-of-work neighbors finding jobs in 2018.
Eric Dent is endowed chair professor of Ethics at Florida Gulf Coast University.