If you were worried that the tax cuts implemented this year didn’t do enough to help middle class workers, worry no more.
Yesterday, President Donald Trump met with the Republican House Ways and Means Committee to start work on what he considers the second phase of his tax cut plan.
President Trump received a lot of flak from democrats over his first round of cuts that they say went solely to the rich. Even though 80% of the country saw some type of tax cut, it was intended to help spur business and improve economic growth. It’s done exactly as intended.
Over 430 U.S. companies announced one type of bonus, pay increase, or even 401(k) hikes that have impacted over 4 million Americans thanks to the first round of cuts.
This time around, Trump hopes to focus on the middle-class in what should be a packaged deal of multiple bills. One of those bills involves making all the tax cuts permanent, something the democrats also blasted Trump over.
“That’s very high on everybody’s list and I think you’ll get more bang for the buck on these tax cuts if you do make them permanent,” said Trump’s Economic Director Larry Kudlow
The hope is to boost the average American income by as much as $4,000 per year.
This second round of bills might also help businesses even further by slashing the corporate tax rate even further by dropping it another percentage point, down to 20%. The extra percentage, Trump says, is ‘great stimulus’ to keep the job growth roaring.
While most of us are cheering additional tax cuts, the GOP hopes to do more than put money in American’s pockets. They also want to promote saving.
The report from Northwestern Mutual revealed that 21% of Americans haven’t saved a dime for their retirement and two-thirds simply don’t have enough saved and are expected to run out in the near future.
Republican Kevin Brady of Texas, the House Ways and Means Committee Chair, believes it’s important for the government to help its people be better prepared for their retirement, and it’s an issue that will hopefully be addressed in September with the rest of the tax cuts.
“We are looking at ways where it’s easier for families to save earlier in life and more over time, whether it’s for health care or for retirement,” Brady said. “We think America is not a nation of savers; we want it to be.”
The idea is to potentially create some type of universal savings account designed to grow over time and be tax-free, as well as simplifying the process of withdrawing the money and even making HSAs easier to use.
Pensions are another consideration.
“We want to make sure they’re adequate and they’re secure for the long term. Workers count on that. Businesses count on that to recruit good workers as well,” Brady added in an interview.
There’s still a long way to go between now and actually having the bill passed that is sure too impact the midterm elections. We’ll keep you up to date as this story develops.