Spring is a time for cleaning. Out with the old, in with the new. And for Tax Day 2018, that means out with the old, overly complicated tax code and its excessively high rates, and in with the Tax Cuts and Jobs Act, which cuts taxes and simplifies things for the vast majority of Nevadans.
The tax reform measure signed into law at the end of 2017 nearly doubled the standard deduction to $12,000 for individuals and $24,000 for married couples.
For many in the Silver State, that means this year’s return will be the last one making us go to the trouble of itemizing our deductions. That means more time for you to use as you like, as well as more money in your pocket for you to spend as you see fit.
Despite what you might have heard from politicians who opposed tax reform, nine in 10 American workers will see more take-home pay under the new law. Odds are, you’ve already started seeing more in your paycheck. The typical family will keep an additional $2,000 of the money they earn this year.
While tax cut foes deride that as “crumbs,” for most of us a couple thousand dollars is real money that we can use to save for college, spend on a vacation or put toward a down payment on a house.
In addition to the immediate benefits of higher take-home pay, the new tax law also includes provisions that will grow the economy in the long run, producing more jobs and higher wages.
Cutting the corporate rate from 35 percent to 21 percent means more businesses will invest here at home, creating more opportunity for American workers. By giving U.S. employers a rate that is competitive in the global market, the Council of Economic Advisers estimates that an average American worker will see a $4,000 annual pay increase.
Some companies aren’t waiting to share the benefits of tax reform.
In just the four months since the law took effect, hundreds of companies across the nation have given their employees bonuses and boosted their pay while increasing their contributions to community organizations.
Here in Nevada, Kalb Industries gave a bonus to all employees who have been with the company for at least three months. The Prospector Hotel &Gambling Hall in Ely gave employees $500 bonuses and boosted its minimum wage to $12 an hour.
NV Energy passed along $80 million in tax savings to customers in the form of a rate reduction. The South Point doubled bonuses for all its 2,300 full-time employees. Developers of The Drew Las Vegas credited tax reform with sparking revival of the project on the Strip.
It’s a nice change. The past 10 years have been tough for Nevada. No state was harder hit by the Great Recession than ours, and by some measures we still have not returned to pre-crash levels.
We still have the fourth-highest unemployment rate in the country. And according to the Bureau of Labor Statistics, Nevada ranks near the bottom in underemployment, which includes people working part-time who want to be working full-time.
But we’re starting to come back, and tax reform is speeding up that process. The key now is ensuring that Washington builds on its success rather than returning to the bad old days.
For starters, the tax cuts should be made permanent. And while some progress was made in eliminating carve-outs for well-connected special interests, plenty more sweetheart deals could be rooted out of the code.
Perhaps most importantly, lawmakers need to resist the temptation to reverse the gains by layering on any new taxes, like a gas tax hike, that would serve only to blunt the gains from tax reform.
This Tax Day, let’s make sure we don’t go down that road.
Wiselet Rouzard is a Nevada field director at Americans for Prosperity.