Column: Bonuses are not Armageddon
Have you checked your paycheck this month? Odds are it went up, or it will soon. As a result of the Tax Cuts and Jobs Act, which President Trump signed into law at the end of 2017, the IRS is updating its withholding tables in the month of February. Once that happens, the U.S. Treasury estimates that 90 percent of Americans will start to see a boost in take-home pay.
Since the tax cut law was enacted, the positive benefits have been resonating across the country. Hardly a day goes by without new reports of more businesses hiring, increasing wages, and offering bonuses and other benefits like paid leave and enhanced 401(k)’s to their employees.
Here in Michigan, Fiat Chrysler is planning to create 2,500 jobs and invest an additional $1 billion in upgrading its Warren Truck Plant. That’s on top of $2,000 bonuses going out to 60,000 workers.
Nationwide, CVS Health is increasing their base wage and implementing a new parental leave program. FedEx announced wage increases, employee bonuses, and plans to expand their operating facilities. Businesses like Best Buy, Lowe’s, and Home Depot are giving out $1,000 bonuses and making additional investments in their workforce.
The list goes on. In total, nearly 400 companies have announced more than $3 billion — and counting — in bonuses for millions of Americans.
Meanwhile, small business optimism is reaching new heights following passage of the tax cuts. According to a new survey by the National Federation of Independent Business, the number of small business owners ready to expand is at its highest levels in the survey’s 45-year history.
Here’s even more good news: The benefits are just beginning to kick in. This tax season is the last time taxpayers will have to file under the old and broken tax code. Under the updated code, individuals and families at every income level will see tax relief.
The standard deduction is nearly doubled to protect more of people’s hard-earned income from taxation. The Child Tax Credit is expanded from $1,000 to $2,000 to help with the cost of raising kids. Tax provisions that many folks rely on still remain intact, including the mortgage interest deduction and deductions for medical expenses, charitable contributions, and more. With these new reforms, the typical middle-income family of four will receive a tax cut of more than $2,000.
Despite the facts, the out of touch and misleading attacks carry on like clockwork. House Minority Leader Nancy Pelosi is predicting the end times, called the law “Armageddon” and the “end of the world.” And as workers received a flurry of $1,000 bonuses, Pelosi repeatedly derided them as “crumbs.”
I’ve heard from many Michigan families who disagree, including a Jackson-based employee who shared his story. “I had been very skeptical of your tax plan - until today,” he wrote my office. What changed? His company awarded bonuses and raised their starting wage. “In my community this will put even our lowest paid employees in a very good position to be successful,” he added.
Helping Michigan families has been the aim of the Tax Cuts and Jobs Act from the outset — creating more jobs with better pay, a stronger and more competitive economy, and a brighter future for those who need a break.
As the tax cut law goes into effect, hardworking Americans should ignore the apocalyptic rhetoric and check their paychecks. They’ll find more money where it belongs — in their pockets.
Rep. Tim Walberg, R-Tipton, represents Michigan’s 7th District and is a member of the Energy and Commerce Committee and the Education and the Workforce Committee.