My buddy said Trump's 2017 tax cuts would just help the rich. I argued they'd help small business. Who was right?

Back in 2017, my friend Mike told me the Trump tax cuts were a giveaway to corporations and wouldn't do jack for guys like me running a small moving company. I argued back that lower rates would let me reinvest in equipment and hire more guys. Fast forward to 2019, I had bought two new trucks and added 3 part-time workers because my effective rate dropped about 4%. Mike's a bartender and saw zero change in his paycheck, so he still says it was a rich-guy move. I get his point, but I was literally able to expand because of it. So who's got the clearer picture here - the guy who saw direct benefit or the guy who saw none? Has anyone else been in a debate like this where your real-world experience either backed up or contradicted what you heard?

2 comments

2 Comments

aaron89616d ago

Mike's situation is pretty common for bartenders and hourly workers. Did his paystub actually show a lower withholding starting in Feb 2018, or was he just looking at his total take home without comparing the new W-4 tables? I ask because a lot of people missed the smaller withholding change and only focused on the big corporate rate cut. If you both had actual numbers from your different situations, the debate gets a lot more grounded than just shouting about what you heard on the news.

emma76816d ago

Right, I totally get what you're saying about people missing the withholding change and focusing on the corporate cut. I'm probably the last person who should talk about paystub details though, because I once spent twenty minutes arguing with my bank that my paycheck was wrong before realizing I'd just looked at the wrong line on my own statement. So yeah, you're spot on about needing actual numbers to have a real debate. Without them, we're all just guessing, which is probably how I ended up thinking my raise was a tax cut for the rich.