The recent tax cuts were set to be put into place when President Donald Trump signed the Tax Cuts and Jobs act on December 22, 2017. “It cuts the corporate from 35 percent to 21 percent beginning in 2018,” (TheBalance). People who supported the passing of this bill believed that it would “supercharge” the economy. They said it will, “start encouraging businesses to increase wages and reinvest in the U.S,” (lifehacker).
As a college student working part time jobs, the wage increase has and will continue to positively impact me. Small businesses can offer to pay employees more money since they will be receiving around a 20 percent deduction in tax filings. This allows workers to earn more money that they can turn around and put back into the economy. “Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent,” (TWP). Overall, wages have increased by about eight cents per hour. The Washington Post says that economist expect wages to continue to increase during times of low unemployment rates.
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If employees are earning more money they can budget out extra spending money rather than using every to cent to pay their bills. Lucia Mutikani, correspondent at Thomson Reuters, estimates that the fourth quarter will have the biggest gain in consumer spending the last three years. This is credited to increased retail says and the anticipated holiday season spending. “Analysts believe the economy will hit the Trump administration’s 3 percent annual growth target this year, driven by the $1.5 trillion tax cut package and an increase in government spending,” (Reuters). Consumer spending connecting to increase is crucial since it accounts for around 69 percent of the U.S. economy
president also signed into law 18 direct tax break to bolster small business growth. Also, Cut taxes
BBC: For the longest, Republicans have said the U.S. tax system is in need of repairing and Trump is the one taking the stand on it. He’s called for significant tax cuts which
A fifteen dollar an hour minimum wage will affect over three hundred thousand workers and cost over two hundred twenty eight million dollars over the next five years(Deng 1). San Francisco raised the minimum wage to fifteen dollars an hour. That being said The Mark Perry of the American Enterprise Institution, Adam Ozimek and Stephen Bronars of Edgewood Economics reported that since the increase many restaurants and hotels have laid off workers (Puzder 1). This comes as no surprise since in 2014 the Congressional Budget Office found that increasing the minimum wage to ten dollars and ten cents an hour would result in 500,000 job losses ( Puzder 1). As of right now 6.5 million Americans are working part time because they’re unable to find full-time jobs and opportunities ( Puzder 1). Raising minimum wage is only going to hurt those that are currently part time, unemployed and the upcoming generation of young adults just now about to enter the working
If the government will listen then, “the raise in wage will not hurt employment like many think” (Editorial Board). If we raise the wage according to the shift in economy then it should only help the economy. The increase in the economy will open up more opportunities for people in return to retain steady work. In reality, “at least a $11 an hour would be needed to raise people above the poverty line” (Editorial Board). That would be a $3.75 increase from the low bomb of $7.25, Americans would make about $23,00 per year vs about $15,000 per year The boost in pay will further the growth of businesses and employment in the American economy. The economy has been in a tailspin before and we want to keep the unemployment low, but also allow people to make enough
Other studies have found that while some job losses may occur, there can still be an economic net gain thanks to the fact that so many workers will have more money to spend. A $10.10 minimum wage would mean a direct raise for 16.7 million workers, according to the Economic Policy Institute, who would then have more money in their pockets to spend on goods and services, boosting the economy. It also found that a gradual increase to $10.10 by 2016 would increase wages by $35 billion, which would boost GDP growth by about $22 billion. The Federal Reserve Bank of Chicago found that even when potential job losses are taken into account, an increase in the minimum wage to $9, as President Obama proposed in his 2013 State of the Union, would increase household spending by $28 billion, or 0.2 percent of GDP. That extra spending stimulates the economy, which can lead to more job growth. There is also real world evidence that minimum wage increases don’t hurt jobs.
For supporters of the wage being raised they are excited for what the White House’s Council of Economic Advisors stated. “White House’s Council of Economic Advisors came out with a briefing that was trumpeted for its claim that we could raise the minimum wage by almost 40 percent (from $7.25 to $10.10 per hour) with no loss in jobs.” (Dorfman, “The Minimum Wage Debate Should Be
The debates on tax cuts are making their way to headlines of every radio station, newspaper, and television station in America. Today, tax cuts would only benefit the wealthy and wouldn’t really benefit the lower class. “The administration and it’s congressional alleys are proposing to sharply reduce taxation of the business income primarily benefiting
As said on npr.org by Danielle Kurtzleben “Donald Trump’s tax plan is indeed a large tax cut, but those cuts would largely benefit the highest earners. According to a recent analysis from the right-leaning Tax Foundation, the top 1 percent could see their after-tax incomes increase by up to 16 percent. Meanwhile, the bottom four quintiles would see their incomes grow by 1.9 percent or less.” Donald Trump is focused on making the rich richer and the middle class less fortunate than they already
The bill officially titled “Unemployment Insurance Reauthorization and Job Creation Act of 2010 (HR 4853),” extended many of the Bush era tax cuts of “The Economic Growth and Tax Relief Reconciliation Act of 2001” (EGTRRA) that then President Bush signed into law. As per the announcement on Desire to Learn, I’ll call this new bill “The Bush Tax Cut Extension.” The bill was signed into law December 17, 2010. I am happy with most of the provisions and cuts as they positively affect most individuals’ lives in this country, including mine. The Bush Tax Cut Extension applies to small businesses as well but I will focus on the laws that affect mainly individuals. Working people, both rich and poor, will be able to save more with the tax
On December 1st, 2017 the Senate passed the most sweeping tax rewrite in decades. Republicans were lining up to approve the bill that will cover almost every corner of the United States economy, affecting families, small business owners and multinational corporations, with the biggest benefits flowing to the highest-earning Americans. Parts of these bills include the Child Tax Credit, the 529 Plan, Blocking Arctic Drilling, and Remove Endowment Tax Exemption.
Yes many Americans will earn more money, but “the cost of many needed supplies and services will also increase.” states an article from The Law Dictionary. (http://thelawdictionary.org/article/the-pros-cons-of-raising-minimum-wage/ )Having an increase in wage can all cause laziness due to the fact that it’s going to be easier for people to get their basic needs. They won’t feel like working hard for what they deserve. In addition, people who work for minimum wage aren’t the poorest and don't live in poor households. On the other hand, people who already live in very poor households, will have to pay the increased prices of many things, due to the raise of minimum wage. Thus making the less fortunate worse
Small businesses, which are said to be the backbone of the economy, specifically may get impacted. Some businesses with really thin margins may not be able to sustain their current number of employees with the wage increase; and organizations will find ways to cut cost through jobs, hours or benefits. Others will push prices up, and some absorb the wage hikes with lower profits. Cutting labour cost would usually be the first option; so business may need to lay off individuals. Companies can and will raise their prices, but they won't be able to raise them enough without alienating customers. Financially it makes sense to remove employees. Removing 1 employee lowers the cost increase to 21%, as mentioned in CCPA proposal of Kathleen Wynne. No small business owner would want their taxes to increase from 40%/monthly income to 50%/monthly income. The real decline will be observed in new small business openings as prospective entrepreneurs. In the short term it will provide benefits, but in the long term it means that new investments and businesses have to integrate the risk of the variations. Managers are encouraged to reduce costs to increase net profits. However, over time prices generally rise, costs increase, and doing business becomes more expensive, resulting in inflation. I think higher wages are better generally, but financially they may not be possible for many businesses.
As far as employment rate, I do believe that it would hurt small business. A small business is normally run by one employee or a few and they might not have the funds to pay several employee. But big company I believe it won’t hurt them, more than likely they have the money to pay their employee and provide medical insurance. But now that they want you to have health insurance, business Polly will cut employee hours to part-time witch will hurt low-income families. But if minimum wages did go up, then this low-income family can afford to provide for their family and health insurance. According to dol.gov, academic research has shown that higher wage sharply reduce employment and training cost. Also, minimum wage increase has little or no effect on employment as studies from economist across the country (dol.gov). If minimum wages was raise I think the government would spend less taxes dollars for low-income family that have food stamps and other government assisted program, because if these low-income family had a little more money to spend each month, they would not need to have more food stamp every month. This also go with child care, every month some parents are giving a break on how much to pay child care provider, when other family over the poverty line have to pay way more than a low-income family would. Now, during my research I had a hard time
The result of this si 85 percent of the tax cut benefits the top 1 percent of earners. This is because most small businesses do not earn enough to qualify for the top tax rate. (So they will not benefit from the cut.)
The encouragement of economic disparity because of these tax cuts is bad for America. The US should be aiming for more social and economic equality for everybody. Tax cuts can slow down the economy by putting more money into the wealthy peoples’ hands and giving less to the people who need it.