Brian Ellis • Investor’s Business Daily
Employers have until Thursday to implement new tax withholding guidelines, which determine how much they withhold from pay for federal taxes.
Fortunately for many Americans, job creators are already seeing lower rates and distributing larger paychecks. Treasury Secretary Steve Mnuchin estimates more than 90% of working Americans will see greater take-home pay because of the Tax Cuts and Jobs Act’s new withholding guidelines.
It’s further proof that tax cuts are working for the middle class. To date, more than 330 U.S. employers have publicly announced tax-induced wage hikes, 401(k) increases, and generous bonuses. While Apple and Wal-Mart grab the headlines, many beneficiaries of the Republican tax bill are small businesses, which account for two-thirds of new jobs in the country.
Missouri-based Dynamic Fastener, a construction hardware supplier, is rewarding employees with bonuses of up to $1,000, while also opening a paint shop, buying new equipment and hiring more employees to make the expansion possible. Montana-based Rod’s Harvest Foods, a local grocery store, is giving out 3% to 5% raises, increasing base wages to $11 an hour, and distributing $500 bonuses. Sun Community News and Print, a weekly newspaper in Upstate New York, is dishing out pay raises averaging $1,000 each, boosting IRA contributions, and investing in software and equipment upgrades.
The newspaper’s publisher had the following to say: “It feels good to get our economic engine running again and create a winning attitude for our small firm.”
He’s right. Lower rates and increased deductions have created a winning attitude for countless small business owners, who now have more resources to invest in the business expansion and job creation that supports their local communities. More than 3 million employees have already benefitted from new tax-related investments.
As the owner of Brooktree Capital Management, a financial advisory firm in Michigan, I’m a small business owner myself. And I’m rewarding the workers who make our success possible. Employees have more take-home pay now and I’m incentivized to keep reinvesting in my business — everyone benefits.
Small business owners — some of our nation’s most dedicated job creators — have never experienced such broad-based economic optimism. And they have President Trump, who has prioritized job creation since his inauguration, to thank for their renewed confidence. Nearly two-thirds of small business owners believe the Trump administration’s economic agenda has helped their businesses and they view the new tax cut legislation favorably, claiming it gives them more financial breathing room.
Their optimism should only encourage the employees who depend on small businesses for financial security. When small business owners are upbeat and ready to expand, the primary beneficiaries are working Americans who see greater take-home pay and more career opportunities.
The positive impact will be felt across the country in 2018. America is home to nearly 30 million small businesses, which employ just under 60 million workers — half of the U.S. workforce. In fact, small businesses account for 99.9% of all American companies.
It’s no understatement: When the small business community succeeds, the U.S. economy is better off. Millions of working Americans are better off.
The proof is in the paycheck.