In politics, words and actions don’t always align. But when they do, the benefits can be huge. That’s why it’s so important for busy Americans to recognize that Congressional leaders and President Trump did just what they said they’d do on taxes: cut them, and unleash big economic growth in the process.
Case in point? Last year, most small businesses said they’d reinvest tax savings in payroll and expansion. And now, in North Carolina and around the country, they’re making good on their word as well.
That’s a big deal in a state like ours — one of many where small businesses play such a big role in the economy — about half our private sector employees work at small firms.
So when small business confidence hits record highs, and public confidence in small business outstrips other highly rated institutions in American life, we know there’s good economic news in the air. When we see small business supporting a tax law by 10 to one, with more planning to boost wages and operations than in decades, we stand up and cheer.
Not that we’re surprised. Far from it. We know basic economics shows that when job creators can keep more of their yearly revenues, productivity and prosperity increase. It’s how the economy expands without having to rely on gimmicks or bubbles.
Today, big majorities of economists agree that above-average growth is coming our way this year and right on into next. The experts now calculate that four out of five taxpayers — nine out of 10 in the middle class — will see tax savings kick in this year.
Now, economics does also tell us a big upsurge of good news like this can sometimes give policymakers special challenges. In a hot economy and a tight labor market, it can be harder to add jobs, and inflation can rise too fast. But the new tax cuts were built right. They haven’t triggered either of those challenges. April’s new jobs numbers continue to smash expectation and unemployment is at the lowest rate since 2000.
That leaves critics of tax cuts (yes, they still exist) without much of a leg to stand on. Which is probably why their objections to the new tax law have grown more farfetched and tone deaf as time has gone on. They now know they can’t get away with dismissing this year’s tax cut bonuses, which hit a billion dollars a day in January alone, as paltry crumbs.
Some tried to badmouth this year’s increased stock buybacks, only to get put in their place by those economists again. In fact, the experts say, buybacks get money moving again, as shareholders signal to companies that options for a good return on investment are multiplying.
Most Americans support the new tax code, expect higher take-home pay, and feel good about the economy. Consumer confidence is higher than it’s been in 17 years. In districts spread across red and blue states alike, confidence in personal tax benefits has increased dramatically — 25 points or higher in some cases — no matter what the critics have said.
And Main Street just keeps on humming. On the heels of the tax cut bonuses, companies have announced benefit after benefit, from stronger health coverage to longer family leave to improved training. With a more internationally attractive tax climate, money tied up or put to work overseas is coming home. And we’re just three months into the new tax code.
Real straight talk isn’t a matter of making the loudest noises. It’s about making a commitment and delivering on it. With today’s tax cuts, that’s what our leaders in Washington have done.
Larry Yarborough represents the 2nd district in the North Carolina House of Representatives.