Last December, President Donald Trump signed the Tax Cuts and Jobs Act into law. Supporters promised that the new law would reform America’s broken tax code, make filing simpler and give a necessary break to middle-class families and low-income earners. I regularly talked with Iowans about the positive impact it would have on their lives and the state. It’s been two months and that positive impact is not only apparent, but prevalent throughout Iowa and the entire country.
At the beginning of the New Year, I spoke to Iowans about how the Tax Cuts and Jobs Act would put them back in control of more of their own money. I’m happy to say that is already happening. Hundreds of thousands of Iowans from nearly every economic background and profession saw an increase in their take-home pay in their last paycheck thanks to the Republican tax cut. Over the course of a year, the typical Iowa family of four with two children making $59,000 annually will see a tax cut of about $1,763. I’ve heard savings like that called meager by some of my colleagues in Washington. But what’s meager to millionaires is significant to so many in Iowa who are saving to buy a home, invest in their retirements or plan for their children’s futures.
For too many years, hiring was sluggish and wages were stagnant due to unnecessarily high tax rates on businesses and individuals. That’s why it’s no surprise that the tax cuts have reignited the economy and created an optimism among business owners not seen in decades. The results of that optimism are apparent in the growing number of companies investing resources back into their businesses and employees.
Here in Iowa, Anfinson Farm Store in Cushing was able to provide $1,000 bonuses and raise wages by five percent for all of its full-time employees due to its tax savings. Pattison Sand Company in Clayton gave its employees $600 cash bonuses and raised their base pays. Some people in Washington think that these pay raises and bonuses are little more than “crumbs,” but to the families in small, rural communities like Cushing and Clayton, the impact is substantial. Other Iowa businesses are reinvesting in their companies and employees too. Ohnward Bancshares in Maquoketa gave $1,000 bonuses for all of its 260 employees. Dohrn Transfer in Rock Island mailed out $1,000 bonuses to all its employees, including approximately 350 who live in the Quad Cities area. Shazam, Inc. gave nearly 400 employees below the VP level $1,000 bonuses and has plans to create new positions. Iowa’s craft brewers, who produced more than 60,000 barrels of craft beer in 2016, are receiving a 50 percent tax break. More than 14,900 Wal-Mart employees in Iowa will receive wage increases this month, as well as additional maternity and paternity leave and bonuses. Iowa companies such as Bank Midwest in Spirit Lake, Employers Mutual Casualty Insurance in Des Moines and Cedar Rapids Toyota in Hiawatha are also putting money back into their businesses and employees. And these are only a few examples.
The results speak for themselves. Some of my congressional colleagues think tax reform was on par with “Armageddon,” but example after example in Iowa and nationally prove otherwise. Americans are increasingly optimistic about their finances and the national economic outlook. A newly released Quinnipiac Poll reported that “a total of 75 percent of American voters say their financial situation is ‘excellent’ or ‘good.’” A recent Washington Post-ABC News poll found public optimism about the economy is the highest it’s been in almost 20 years and the U.S. unemployment rate is the lowest it’s been since 2000.
More than 300 companies nationwide have announced tax reform bonuses, raises or 401(k) increases that will improve the lives of at least 3 million American workers. Many have also increased charitable giving commitments in their communities, created new jobs and increased their stateside operations, bringing more jobs and more money back to the United States from overseas. According to a report from the United Nations Conference on Trade and Development, the Republican tax cuts could repatriate nearly $2 trillion. And that’s all on top of the increased take-home pay tens of millions of Americans are already seeing in their February paychecks.
I’ve long advocated for lower taxes and a simpler, more competitive tax code. Republicans in Congress and President Donald Trump worked hard to deliver the first major tax reform since 1986, and I’m glad to have been a leading voice on behalf of small businesses, farmers and all Iowans. The common-sense reforms in the Tax Cuts and Jobs Act are making a significant, positive difference in Iowa and the lives of hundreds of millions of Americans across the country, and this is only the beginning.
• Chuck Grassley is a Republican U.S. senator from Iowa.