Just before Christmas the U.S. Congress passed and President Donald Trump signed a bill to make sweeping changes to the federal tax code. The changes included reducing tax rates, reducing the number of tax brackets, reducing taxes on small businesses, and a major reduction in the corporate tax rate.
The measure was passed mainly by the Republican majority in the House of Representatives and exclusively by the Republican majority in the Senate.
Republicans have been heralding the huge impact the tax reform will have on making the economy great again. The Democrats, led by House minority leader Nancy Pelosi, have been saying that the tax reform only benefits the rich with only “crumbs” for the everyday American.
As you will see below, if the result of this tax reform is “crumbs,” then Americans will want more of them.
I can completely understand that minority leader Pelosi would think that the benefits to the everyday American would be crumbs. It is estimated that the three homes that are owned by the speaker and her husband are estimated to be worth somewhere around $40 million.
However, it should also be noted that minority leader Pelosi and her husband within days moved to sidestep a provision of the new tax bill that would penalize the rich by eliminating the tax deduction for excessive real estate tax deductions. They paid all of their real estate taxes for the next year before Dec. 31 in order to avoid losing those deductions.
It is also understandable how Congresswoman Chellie Pingree would follow her leader in not wanting to give Maine people any “crumbs” as she is a multi-millionaire and voted against the tax reform bill.
Following right along is our multi-millionaire Sen. Angus King who also voted against this “crummy” bill.
With assets such as these, it is understandable that they might view bonuses, tax reductions and wage increases as “crumbs”.
We need to put “crumbs” in perspective.
Camden National Bank, a Maine company headquartered in Mid-Coast Maine, announced almost immediately after the tax reform package was passed that it would be giving a $1,000 bonus to full-time employees and $750 bonus to part-time employees (the “rich” executives at Camden National received nothing from this action).
These bonuses are being followed up with Camden National Bank ordering a review of its base wages to see if an across-the-board wage increase may be warranted for these same employees.
Camden National Bank’s action has resulted in an estimated $620,000 being infused immediately into Maine’s economy. One can be certain that these Camden National Bank employees do not regard this windfall as “crumbs.”
There have been almost 300 other companies around the country that have also announced bonuses with some being significantly larger than the $1,000 realized by these Maine workers.
What other “crumbs” will Maine workers experience? It is estimated that about 80 percent of working people will experience a reduction in payroll tax deductions as a result of the tax reform bill.
Will this be a huge amount of money? It is impossible to know. However, $10, $15, or even $20 a paycheck may be “crumbs” to those who voted against tax reform, but to the people who receive those paychecks it is real money.
The largest and most important “crumb” of the tax reform will be an expanding and growing economy. This expansion will create more jobs. The creation of more jobs will put pressure on the amount of workers available which, in turn, will put more pressure for wage increases as employers must compete for workers.
Bonuses, more take home pay, more jobs, and higher wages will benefit the everyday American in a huge way. Chellie Pingree and Angus King are both up for reelection this November. Maine workers should remember that both of these politicians voted against your receiving a bonus, an increase in take home pay, a wage increase, or a new higher paying job.
Another View is a weekly column written collaboratively by Dale Landrith of Camden, Ken Frederic of Bristol, Paul Ackerman of Martinsville and Jan Dolcater of Rockport.
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