We are less than a week away from Christmas. Whether you are single woman, a new mom, or an empty nester, you are probably feeling the pinch to your pocketbook of holiday preparations, parties, and presents. National spending this holiday season is on pace to exceed last year’s levels, but there are many households that struggle just to meet everyday expenses. The best gift that Washington can deliver to all Americans is to allow them to keep more of what they earn.
A tale of two households: Those with cash to spend and those living paycheck to paycheck
Consumers are in the mood to spend this year. According to Gallup, Americans plan to spend $862 on Christmas gifts this year – up over $100 from last year. Not everyone has that kind of cash laying around; many women and families have no savings. According to a recent Federal Reserve study, nearly half of all Americans would not be able to come up with $400 in an emergency.
A significant number of Americans are living paycheck to paycheck, and it’s not just low-income Americans. Ten percent of those earning at least $100,000 – middle class in many areas – say they struggle to make ends meet as well. Paychecks simply have not kept pace with the cost of living even while our economy has improved.
Overall wage growth has been at its slowest pace in decades, and women’s paychecks have been even slower to rise.
Women have made gains in the workplace and now make up 47 percent of the U.S. workforce. We are primary or sole breadwinners for more than 40 percent of U.S. homes and manage household budgets. So, we are acutely aware of just how much every extra dollar counts.
Women will see their paychecks grow because of tax cuts
Cutting taxes and reforming the current outdated tax code are the kind of pro-growth policies that will deliver better-paying jobs, fairer taxes, and bigger paychecks. The Tax Cuts and Jobs Act promises to do that.
Families at all income levels will receive a tax cut in 2019 with larger percentage cuts for middle income earners according to projections from the Joint Committee on Taxation. Consider these scenarios: A single dad with two kids earning $50,000 would see his taxes fall by nearly $1,900. A married couple with two earners and two kids making $165,000 would see their taxes fall $2,200. That additional $150 – $180 per month is money that these families can save for a vacation or use for date-nights and daily expenses.
Families are a priority under tax reform
Tax cuts for families, working moms, and individuals are just one benefit. The final bill doubles the standard deduction, meaning no matter if you’re single or married, more of your money will be tax free. For single people, that means the first $12,000 you earn is protected from taxes. For married couples, that’s $24,000, up from the current $12,700. For single moms and dads who file with the Head of household status, the new standard deduction will be $18,000, up from $9,350.
The plan also expands the Child Tax Credit to help with the cost of raising children. Parents with kids will get $2,000 per child, up from $1,000 in current law, and the first $1,400 would be refundable, which will really help poor and middle class households. In addition, they will receive a $500 credit for non-child dependents (such as elderly parents or other family members who need care).
Additional tax relief will also help women and families open their homes to adopt children, put money away for college, educational expenses, and retirement, and continue to support charities that strengthen our communities.
Women benefit as our businesses grow more competitive
Reform on the corporate side will help female workers and families too. Small business and corporate tax cuts coupled with individual tax rate cuts will mean a real boost in earnings — and access to more jobs — for millions of people. Three out of four CEOs indicated that successful tax reform would prompt them to increase hiring. At the same time, wages are expected to rise by eight percent over the next ten years if the corporate rate is lowered.
There has been so much misinformation about the tax reform effort including claims that tax reform is a “bad deal for women and families.” That is simply untrue. It’s a hollow talking point from critics who won’t put forward any ideas of their own, but would rather keep our burdensome, unfair tax code just the way it is.
As shoppers grab last-minute gifts this week, their final paychecks of the year could go a lot farther if they earned more and could keep more of what they earn. Congress has delivered pro-growth, pro-family tax reform to every household this year–a welcome gift for women and families, which will be a boost to our budgets and to our economic future.