Tax season is the time of year when Americans are reminded just how deep the IRS reaches into our pockets. But this year, Americans across the country and in Arkansas can have at least a modicum of relief, knowing that the benefits they’ve already begun to reap from tax reform are only going to get better.
The tax bill cut rates at every level of the income ladder, and in January the tax withholding calculations were adjusted so Americans started seeing those tax cuts show up in their take-home pay. Paychecks are larger. Companies across the country have issued bonuses for their workers. People have more in their bank accounts, and in their wallets. It’s unambiguously a good thing; while career politicians may be casting aspersions about whether Americans keeping more of their own money is a good thing, Arkansans certainly know better.
Americans are already benefiting from lower rates, but standard deduction changes that will take place for the tax year 2018 will make dealing with the IRS even easier next year. The standard deduction is set to almost double for individuals and married couples, which will result in additional tax relief for individuals and families across the country.
Tax cuts up and down the income ladder were predicted by policy experts and forecasters. The House Ways and Means Committee found that the median family would get a tax cut in excess of two thousand dollars a year. This is before taking into account the millions of dollars Americans have received in bonuses or expanded benefits, the money taxpayers will get to keep in the form of reduced utility rates, or the higher wages workers will experience due to a more competitive international tax code.
While large companies, such as Disney and AT&T, have grabbed headlines for rewarding their workers with tax reform bonuses, smaller companies have seen benefits. Whether they’re sole proprietorships or family businesses that can reinvest in themselves and their workers, companies of all sizes have been reaping the rewards of tax reform and passing the benefits on to their employees.
A study from the Tax Foundation has found that the tax legislation will create more than two thousand jobs in Arkansas, and that middle-income families in the state will see an average of $504 gain in after-tax income. Arkansas’ congressional delegation deserves plaudits for the passage of the legislation - and particularly those who will be facing tight congressional races this year, like Rep. French Hill (2nd congressional district). They leveraged their political capital to pass a law that will bring a large package of benefits to the state of Arkansas, and families across the Natural State.
As Americans have come to see the tangible benefits of the tax reform law, its popularity has soared. In December, bolstered by a sympathetic media, the Democratic message that the tax reform law was a giveaway to the wealthy and that middle-income Americans would see no benefit was the dominant narrative: 57% of people disapproved of the law. But by the end of February - well into tax season for many Americans - the script flipped, and a majority of Americans now approve of the law.
Republicans took a risk voting for legislation that was unpopular because the liberal narrative had hold of the popular imagination. Now that Americans are seeing the results, it’s time to acknowledge that standing up for a law that they knew would bring tangible benefits to families across the country and in Arkansas. The members of Arkansas’ congressional delegation that supported the TCJA knew they were supporting a law that would bring jobs, prosperity, and economic growth to the state.
There is still heaps of work to be done to make the tax code fairer and simpler, but the passage of last year’s Tax Cuts and Jobs Act has helped Americans across the country by putting more money in their pockets, and promising to do even more to help people in the coming years. Tax season is rarely a time to celebrate, but at least in 2018, we can be thankful that it’s going to be a lot less painful.
Brandon Arnold is Executive Vice President of the National Taxpayers Union, a nonprofit dedicated to advocating for taxpayers in every state across the country.