The Tax Cuts and Jobs Act cut the corporate tax rate from 35% to 21%. As a result of this transformational overhaul, many companies have been able to hire more workers, dispense bonuses, and pass savings along to Americans. They also happen to be remitting revenues to the Treasury, as they bring assets long parked overseas back into the U.S. to be taxed. Apple alone is expected to pay $38 billion in “repatriation taxes,” equivalent to almost 16 percent of all projected corporate tax revenue in 2018. Despite these successes, Democrats have distorted and obfuscated about the effects of TCJA, with Sen. Ron Wyden recently pointing to stock buybacks in the energy sector as evidence that only big businesses are reaping the rewards.
Stock buybacks, as NTUF has explained, are an example of economic health. Buybacks benefit the economy as a whole and workers for the companies who initiate buybacks. Companies who initiate buybacks are more successful over the medium-term than their competitors.
The energy utilities that have benefitted from tax reform are passing along the savings to consumers. More than 100 utility companies have lowered rates for customers since TCJA passed, resulting in more than $3 billion in savings for customers. Contrary to what Sen. Wyden alleged, American consumers are winners, not losers, from tax reform, and energy utilities in particular have used the TCJA to lower prices for customers.
The TCJA was projected to boost economic growth and worker wages, and result in an additional 339,000 jobs. Those benefits are being realized throughout the economy, and they’re being passed along to workers and consumers. Interestingly, even by sophisticated modeling across age and income cohorts, the tax system is not becoming “unfairer” as a result. According to an analysis just released by Berkeley Professor Alan Auerbach and Boston University Professor Laurence Kotlikoff, “the TCJA did not materially alter the fiscal system’s within-cohort progressivity whether one measures progressivity in terms of the share of spending done by the rich or the share of taxes paid by the rich.”
Sen. Wyden and other Democrats who have made claims that last year’s tax legislation has led to concentrated windfalls solely for business owners are incorrect – and the millions of Americans who have seen direct benefits know that.