Tax Reform...a few month's in

We're a couple of months into the implementation of the tax reform bill, or as Democrats like to call it, Armageddon.  It's way too early to tell what the long term impacts will be but there are a few indicators that we can look at and informed suppositions we can make.  

By far the biggest result has been the impact on business.  We've seen company after company announcing bonuses to their employees (usually around $1000), increases to 401K contributions, and are gearing up for wage increases.  The generally accepted number of companies as of today is 164.  You can see a pretty good summary here.  I think that this number will only increase as the coming weeks and months unfold.  The estimate is that more than 2 million workers have felt this economic benefit.  

Then there's the stock market.  There is no denying that it has been zooming up.  This week alone it was up over 1000 points and closed over 26,000 for the first time.  Now, while it is generally good for individual investors, not everyone owns stocks.  But large institutional investors are key owners that drive wealth accumulations.  Mutual funds, retirement funds, and others will benefit tremendously from this increase.  And companies will increase in value and in turn will give more wage increases, bonuses, engage in research and development, build more and better facilities, expand their business, and just generally grow.  And that means increases in all the things that benefit employees.

There is a story that there are trillions of dollars overseas that companies have been reluctant to bring home because of the onerous tax rates above 30%.  With tax reform, they will be able to bring that money home for a rate of 15%.  This means billions of dollars being reinjected into the economy.  It means a huge windfall to the government as a result of taxes on these funds, even though they are less than they would have been under the old system.  It means companies using this money for reinvestment.  It's a good deal all around.

Unemployment has dropped to record lows.  I heard today that unemployment is at the lowest rate since 1973.  Even better, the unemployment rate of the black community is at the lowest rate in history!  I hope I don't have to explain why employment is so important to our populations bettering themselves, increasing their standard of living, increasing their self-image and sense of personal responsibility, and just generally being a productive member of society with potential to improve yourself and in turn the next generation as you go through life.  Every day there's another announcement about the need for more workers.  Just today, Amazon announced that they will be adding another 50,000 new jobs.  

Another interesting fallout will likely be health care.   The cost of health care has increased for almost everyone, but most egregiously for those who buy health care privately through the government exchanges.  If you're working for an employer who offers health care, then you'll be able to get coverage much cheaper.  Health care has been an issue that has been batted about by both sides and no good solutions have been offered, especially by those who think the government should take it over.  But here's the reality.  We have around 350 million people in the country.  The vast, vast majority get their health care from employers, Medicare, the VA, or some other program.  The number of uninsured who need to get health care independently is very small in the scheme of things.  The media likes to over blow the problem by generalizing "Americans who need health care".  So if we can get more people to work and covered by employers, we can drive down those who can't get health care economically and improve their lives.  

There are others, but the best example is Apple.  The news today from Apple was pretty mind boggling.  Apple said that they "will repatriate almost all of its $250 billion in overseas cash, create 20,000 new U.S. jobs, open a new U.S. campus, and add $350 billion to the U.S. economy".  This ends any serious debate about the new tax reform law.  It is a blockbuster success story less than tow months after implementation.  

Pretty soon workers will start to see the impact on their paychecks as withholding tables are adjusted to reflect the new rates.  Of course, the savings will be varied, but everyone in the workforce will be having less money withheld and therefore more money in their paychecks.  And who couldn't use more money every month?

And how about the welfare rolls.  The number of people on food stamps and other assistance is consistently dropping.  I don't have the numbers but from all the reports I've heard, the trend is very positive (meaning decreasing numbers).

We haven't seen the new tax forms yet, but they are bound to be simpler.  With the deductions limited and the standard deduction increased, many, many more people are going to be able to submit their taxes on a small, simple form.

So what's the problem you may ask.  Well, I think we all know what the problem is.  It's that there are a lot of people, and specifically Democrats, who have a visceral hatred of President Trump.  They've bought into all the slanted news about him unquestioningly and will do anything to obstruct any program that Trump might be in favor of, especially if there's a chance it will be successful.  This is true even if it benefits America and Americans.  I've not seen such obstructionism, such hatred, such outright and unashamed actions to thwart a President in my lifetime.  It is really pretty shameful.  What's really sad is that I've practically stopped trying to have dialog with people regarding policy or politics because so many have been blinded and, frankly, brainwashed.  I'm hoping that at some point many will see the reality of success and realize they should investigate for themselves what their opinions and beliefs should be, and not go blindly into the night like lemmings.  But...I'm not optimistic.