January is a time in which many Americans take the opportunity to make positive changes in their lives. Business owners may seek to expand their businesses, entrepreneurs may seek to start a new enterprise, and families may wish to purchase a new car or save enough to buy their first home. With the recent passage of the Tax Cuts and Jobs Act, the opportunity to achieve these goals is greatly enhanced.
The average American family will get to keep more than $2,000 this year under The Tax Cuts and Jobs Act. In addition to lowering the rates for every income bracket, this law doubles the standard deduction, doubles the child tax credit and repeals Obamacare’s individual mandate which imposed an unfair tax on mostly lower-income families making less than $50,000 a year.
Businesses will also see relief, with a new corporate tax rate of 21 percent (from 35 percent), taking the U.S. from one of the highest to one of the lowest corporate tax rates in the world. Small businesses also benefit, as the Tax Cuts and Jobs Act creates the first-ever 20 percent deduction for pass-through business income.
The American economy is responding. The stock market is breaking records this month as the Dow reached 25,000 for the first time ever. Businesses are announcing new investment and bonuses for staff. Over 100 U.S. companies have announced plans to increase wages, pay yearly bonuses, increase 401(K) matches and expand charitable contributions because of the tax reform bill.
Wells Fargo, which is chartered in South Dakota, has announced that it plans to increase its minimum wage to $15 per hour, effective in March 2018. We expect even more businesses to follow suit in coming months, as the Tax Cuts and Jobs Act provides companies with the capital and stability to reinvest in themselves, their employees and the economy.
Agriculture is poised to benefit from tax reform as well. In a Farm Forum article from Dec. 26, Wheat Growers CEO Chris Pearson calls tax reform a “win” for farmers. This is due to an amendment that stops a massive tax hike for farmer co-ops that was projected to cost them $2 billion annually.
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