The Daily Signal - Here’s How Trump’s Tax Cuts Have Benefited All Americans

Episode Date: December 20, 2019

The American economy has had a strong year. How much of this can we attribute this to the federal tax reform passed in 2017? Rachel del Guidice speaks with Joseph Sepervivo, the founder and CEO of Joseph's Lite Cookies. Sepervino explains how tax cuts have not only benefitted his business but Americans as a whole. Rob Bluey joined del Guidice in an interview with economist Stephen Moore, a fellow at The Heritage Foundation, who explains how tax cuts have benefitted the economy. Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Friday, December 20th. I'm Robert Blewe. And I'm Rachel Del Judas. This Sunday, December 22, marks the second anniversary of the Tax Cuts and Jobs Act. It's one of President Trump's signature legislative achievements and a story we've tracked closely at the Daily Signal. Rachel and I were recently invited to the U.S. Treasury Department to interview key individuals about the tax cuts, recent trade deals, and America's economic growth. We featured some of those interviews on the Daily Signal podcast. podcast earlier this week. Today, we're bringing you some of the other interviews from our time at the Treasury Department. We will begin today's show with the story of Joseph's Light Cookies and an interview with

Steve Moore, a visiting fellow at the Heritage Foundation. You'll hear from Michael Falkinder, Assistant Secretary of Economic Policy at the U.S. Treasury Department, and Christopher Netram, Vice President of Tax and Domestic Economic Policy at the National Association of Manufactures. We also spoke to Ken Benston, President and CEO of Securities Industry. and Financial Markets Association. John Karsh, Vice President of Communications and Americans for Tax Reform, joined us, as did Adam Michelle, a regular daily signal contributor and a senior policy analyst at the Heritage Foundation.

Stay tuned for today's show coming up next. Americans have almost entirely forgotten their history. That's right. And if we want to keep our republic, this needs to change. I'm Jared Stepman. And I'm Fred Lucas. We host the Right Side of History, a podcast dedicated to restoring informed patriotism, and busting the negative narratives about America's past.

Hollywood, the media, and academia have failed a generation. We're here to set the record straight on the ideas and people who've made this country great. Subscribe to the right side of history on Apple Podcasts, SoundCloud, and Stitcher Today. We're joined on the Daily Signal podcast today by Joseph Sumprevivo, who is the founder and CEO of Joseph's Light Cookies. Joseph, thank you so much for being with us today. Thank you so much for having me. You know, it's been a very interesting journey in my lifetime. The cookie company was started when I was a little boy,

a diagnosed with diabetes, at the age of nine. And at that time, my mom and dad had a restaurant. And they went away on the very first vacation. We came back, and the restaurant was empty. A manager stole everything they had. They went bankrupt. And here I am a little diabetic boy, watch my parents struggle and lose everything.

at this time I'm about 11 and a half years old and I decided one day I want to make a difference and my parents wind up you know my dad was a cook my mom was a waitress at the holiday inn and they decided to open up

another restaurant and they were talking to me and I said well my dad said I want to make an ice cream and serve it to everybody and I said geez I want to make a sugar-free one So I want to make it a sugar-free ice cream. I'm selling it to 197 stores. And then one day, after freezers broke down at a store, and we had to throw everything away, I asked my parents,

could you make me a cookie? And they did. And I fell in love with it. It was the first sugar-free cookie I had since I was diagnosed. I'm now 15 years old. And we, to watch my parents skip meals, and because I remember very vividly, We would sit down for dinner and my mom and dad would never eat.

And I would say, Mommy, Daddy, why aren't you eating with me? And with us, my brother and sister and I. And oh, I ate when I was cooking. And that was all because they didn't have enough money to pay for my insulin. So they had to skip meals save on food costs so they could pay for my medicine being a, I was a diabetic. That's always stuck in my head very, you know, very vividly. So when I jumped in and we were making cookies, and I've been doing that now for 33 years and a sugar-free pancake syrup and all these other products that we're getting to share this product across the world. That's really incredible.

Thank you so much for sharing that story. So you mentioned that your business is more than cookies. You mentioned the pancake syrup. Are there any other products that your company makes? And also, how big is your company? How many folks do you have working there? Total company, we have seven people that work for the company. Wow.

And you do so much with such a, you know, it's a pretty lean staff. So you're no stranger to the Daily Signal. We've actually covered your small business and how you supported Republicans tax reform package that went into effect in January of 2018. And that tax package for people who might be a little rusty on everything that it did, a few things it did was reduce the federal corporate tax rate from 31, 35% to 21%. and also repealed the corporate alternative minimum tax. So two years down the road, Joseph, looking at what your life and your business climate was like before tax reform to now, two years later, how would you say tax reform has impacted your business? It's given us more freedom.

More so than anything, the cash that was freed up, rather than sending money to Washington, D.C., and having to budget for that money, every single year, year. I look at it as if you have a dollar and you out of that dollar, you have to put away 30 cents every year in this bucket just so you could pay your taxes 12 months later. That's money being taken right out of the economy. What these tax cuts allowed us to do was to put that money to work, invest back into equipment, invest back into our team members. We expanded our Serap Company. We had seven, you know, total of seven employees. We expanded our

syrup company. We only had one person in the Serap Company. We now have 11 in the Serap Company. We opened up another business, a real estate brokerage firm, from the free funds that were released. We hired 16 people in that company.

I just created another product line that is not related to food. And that gets launched in 2020, created another small business. We'll have about three employees, three to five employees there. And so this is just completely given us freedom to expand to hire more people, more middle class taxpayers and upper middle class taxpayers. They'll earn great wages and they'll work hard and contribute to society and the economy. Well, that's incredible. Looking at what happened

with tax reform, are there any specific elements to the package that you say were specifically effective? If there was like, you know, one or two things you could pull out of everything that happened, is there one thing you were like, this was the most helpful to us? To me, it was more of a simplification of the tax code. And I know in everything that you read out there, people are saying it's more complicated. It's actually simpler to do our taxes this year. And there was a specific section, Section 199A. where in a pass-through companies, which is 60 million, you know, you figured what, 30.2 million small businesses that employ almost 60 million people in the country.

They're pass-throughs. They get to take advantage of 199A, which means there's 20 percent. I'd like to look at it this way. 20 cents on the dollar of qualified income is freed up. 20 cents on the dollar. So that business gets to employ 20 cents on the dollar towards marketing, to hire new people, to give new raises, to, you know, small businesses struggle to keep people. So guess what? We're throwing money at our team members to keep them.

We can't afford to lose them. So their wages are going up pretty aggressively, whether that's through bonuses and raises and higher starting pay. It's really a beautiful thing, what's been happening. So the total of the package is wonderful. I like $1.99A because it freed up 20 cents on the dollar for small business owners in the United States. So that's what I love about it. So last July, I think that was when we last spoke for reporting I was doing on tax reform. You had specifically mentioned that you were able to hire five additional employees.

You gave raises to your employees. And you were able to expand overall production. How did your employees react to those raises? Are there any specific stories that you can pull out remembering what happened and how they reacted to be able to get a pay raise maybe for the first time in a while? Oh, absolutely. So I went to Mike, one of our team members for a long time, and it said, here's your raise. And the raises were between $3,000 and $5,000. And I'm just rounding down and up.

But between three to $5,000. It depended on years of service and everything else. That was per year and it's ongoing still today. Mike has two little babies, two little girls, and his car was getting a little beat up, getting miles, not as dependable. He went out because of the raise and bought a car, bought a car for his wife to drive. So he knew his three girls, his wife and two babies, were safe. And this car was made in Michigan, and this is what I love about this. It was made in Michigan.

So the auto manufacturer, the union members made money. It was transported to Florida. So the truck driver made money. The auto dealership made money. The salesperson got his commission for selling the car. And the insurance company, the salesperson made money. All this money stayed in the United States. Help stimulate the economy.

And he feels gratified and happy that he's providing for his family. That was one example. Another one, Linda went out and bought a home with her raise, that extra $290 a month, $300 a month that she received was the difference that she needed to be able to buy a home. Now you have somebody buying a home that supplies were, you know, harvested and created in the United States, the laborers from the United States, and Linda gets to live in this brand new home built in her town and all because of the Republican President Trump tax cut. an amazing thing, and it affected, it's affecting so many people's lives. And then look at the 16 people that I just hired in this new company, and the other three that I'm going to be hiring in the other firm. And 10 that we added for the pancake syrup company with a new factory, by the way,

you know, so 50,000 plus 50 to 100,000 square feet. So this is all new things, all new investments made in our country. It's amazing. So you had mentioned overall expanding production. You just mentioned now the new factory, adding people to the syrup company that you all have. What is that meant? Are you not only adding new people? Are you also making new kinds of cookies?

Like what else does that expanding production? What has that looked like for you guys? So we were able to really focus our energy on our pancake syrup company because the freed up capital, that extra money, we really put to marketing our sugar-free pancake syrup. And that's where we, because of that extra marketing over the last couple years, that was since 2018. That enabled us to grow the sales. And I'm talking 30% growth rate since this tax cut has come into effect.

And we're going to probably end this year at a 32 to 35% growth for our sugar-free pancake syrup. So we decided to invest more money into the pancake syrup company in growth. that. We have sugar-free pancake syrup, peanut butter, and coffee. So we're putting our energy into that, and that's where the new factory is, and that new factory is in Florida. So we're really excited about that project. And it was all because of the tax cuts. So House Speaker Nancy Pelosi and some other Democrat leaders dismiss tax relief as insignificant, with Pelosi ridiculing what Americans got as, quote, crumbs. And as someone who has been directly impacted by these, quote, Crumbs. How would you respond to her assessment of tax reform?

It just shows us out of touch Nancy Pelosi as in the Democratic Party is with the hardworking middle class Americans. I mean, I've been there. I watch my parents skip meals. I've seen what it was like to struggle not to have enough money for medication. And then just belittling, oh, it's only $3,000 a year or $1,800 a year. People get to pay. put in their extra back into their pocket. Well, you know, that $1,800 is a difference or $3,000 is a difference between paying your electric bill one month and not, or being able to buy groceries for your children, that it makes a big difference in people's lives, buying cars, being able to buy a home, you know, your first home at the age of 68 years old. I mean, these are, these are

a huge thing. Nancy Pelosi and the Democratic Party is way out of touch. They can't. cannot relate to the everyday person. They say they can. But these types of comments about their just crumbs just shows you that the proof it's in the pudding, they really don't know what it's like to struggle and be an average everyday American. And I'm ashamed. I'm ashamed of that comment. Some liberal politicians, this is also very surprising, given the success you're talking about.

It doesn't seem like they appear to recognize it. but they've suggested that they would, if given a chance, repeal some or all of Trump's tax cuts. How would that affect your business if that ever happened? Well, what would definitely happen is the raises would have to be removed, and people would have to lose their jobs, factually speaking, because we would have to start taking the money from the economy and holding it back into the bank account. So from a budgetary standpoint, we're going to be losing all those funds,

which are all these jobs that have been created would be reversed. And that's just not true for my company. This is across the board. I'm seeing expansion at businesses all across the United States, small business owners that I know. And, you know, they would have to do the same thing. They'd have to lay off people. They'd have to close buildings.

You know, I'm opening up, you know, I'm hiring 50 people in my real estate company. I have 16 now. I'm hiring 50 opening up multiple locations. And I would cease expansion altogether. And I would have to look at alternative ways to save money. And that's going to be even wage cuts and downsizing. So hypothetically speaking, looking back and had tax reform not happen, had Republicans not let on that, what would the outlook of your business as well as your

employees' lives look like today? I know you mentioned the story of Mike and him being able to buy a car for his wife so that she'd be able to have a dependable vehicle to drive him around while he was at work. What would it have looked like had tax reform not happened? Well, that's a fantastic question. We experienced eight years prior to President Trump, eight years of uncertainty between regulation and taxes. And we were really frightened. I mean, we tightened the purse strings. Our sales, their growth rate was not the same as it was pre-Obama.

And our growth rate now is parabolic. It's like a rocket when, you know, 30, you know, 32, 33 percent will end up year-end. 30% last year. I mean, the growth is just phenomenal. I'll tell you, those eight years I saw enough, and we had to really hold back and draw, close, our purse strings. And if we didn't have these tax cuts, I don't really know if we would be in business today. And I'm very serious when I say that, because we were scrimping and saving at every corner because the uncertainty, we felt it even with our customers, Rachel, and when they would call in, well, you know what, I better not order for all my stores and distribution as much as I did,

you know, eight years ago, nine years ago. Now they're saying, you know what, give me an extra 35, 40%, 50% on the cases. And some are saying give me an extra $3,000. give me an extra 10% on the cases, 12% on the cases. So they're increasing their orders across the board. Everybody, every one of our customer sales are up in our company. And that, you know, we talk about it on the phone. I still talk to a lot of my distributors on the phone, and it's always the same message.

It's like, now we feel great about the economy. We feel great about our country. We are investing back. We bought new trucks. We hire new people. We're opening more stores now. We're expanding. And this is huge.

Looking ahead, what would you like to see if Republicans decided to tackle a second tax reform package, say, you know, tax reform 2.0? I know some Republican leaders in the House especially have been talking about that. So if they were to pursue that, what would you tell them as stuff that you would like to see included in a tax reform 2.0? tax tax cuts 2.0 is absolutely for small businesses in general. I see flatten the tax brackets, make it as simple as possible to file taxes. I like the holding for even for a small business, because remember it's a pass-through, so everybody's paying on their individual tax rate, drop the individual tax rates for all small business owners, give them the ability to have a lowest possible flat tax rate system, 15, 20, 21%.

I'm not talking about a flat tax as in one tax for all that rate. I'm just saying flattening out the brackets and making it simple for a small business owner to file their taxes where you can almost do it on just one sheet of paper. And that would just really make it fantastic for small business owners. Well, last but not least, Joseph, you're the author of a bestselling and award-winning. book, Madness, Miracles, Millions. Can you tell us a little bit about the book? We wrote it because we struggled so much. Our lives were up and down between medical issues and financial issues and we struggled and we thought we were very alone. And as we were,

you know, how we've been out there selling the book and talking to people, we found that our story is not unique. Everybody has struggles, whether it's in business or relationships or whatever so we wrote this book to really touch people's life to tell them you're not the only one going through it like we thought we were the only one going through it and people read into wow it's the most inspired you know it's one of the most inspiring books we've ever read so um it's to inspire people it talks about business it talks about life and love and you know my parents relationship and how um how each day is a very blessing a blessed day in our country and how we're very fortunate to when we get hit with tragedies, we can be triumphant by our attitude and our mindset. So that's why we wrote it. Well, Joseph, thank you so much for being with us today on the Daily Signal podcast. It's always a pleasure to talk to you. Thank you so much, Rachel. I really appreciate it.

The Daily Signal podcast is coming to you from the U.S. Treasury Department today, and we're joined next by Steve Moore. He's a visiting fellow at the Heritage Foundation. Steve. Thanks so much for being with us. I had to come all the way over the Treasury Department to see you. That's right. We could have just done this in our studio, but it's great to have you here.

Well, it's exciting day. This is a big anniversary of this tax cut that you know we at Heritage played a big part in putting together. And so we're really proud of, A, the results and B, having worked with Donald Trump to put together, I think, a tax cut that has been a spectacular success in almost every way. Well, and you personally, I mean, from the time of his campaign through that first year, I mean, laying the groundwork, I mean, it took a lot. of messaging, of number crunching to get us to the point where we are today. What is your message? By the way, you know, I saw Trump, I saw the president about three weeks ago. And, you know, we were just talking about that.

About, you know, four years ago, we started to put this plan together. And I just said to me, I said, Mr. President, it's working actually better than we thought it would work. I mean, when you look at the state of the economy today, which, in my opinion, in a lot of ways, is the best in my lifetime, certainly for workers who are looking for a job. And, you know, it's just amazing that the tax cut has played such an important role in terms of helping businesses expand. This was a pro-business tax cut. Trump says that unapologetically. And what bothers me, Rob, is to listen to the Democrats.

I mean, they're running on repealing this. So if you switch those dials back in the wrong direction, you're going to see a reverse effect. Well, you certainly have that. So let's just let's jump in there. I want to talk about the positive and then also the consequences of doing so. So the left has made it a point. We've heard Bernie Sanders, Elizabeth Warren. Of course, Nancy Pelosi famously said that it was crumbs, you know, that the American people received.

So what is your message then to not only those leaders here in Washington, but also to the American people that they need to know about this law? Well, my favorite one is the one that we talked about in the Wall Street Journal about six weeks ago. I'm really honored. Trump mentions it every single speech that he gives. He leads with this that since Donald Trump was elected, entered the Oval Office through the end of September of 2019, average median family incomes. I'm not talking about, you know, the rich people like Warren Buffett and, you know, Bill Gates and Tom Brady and people like that.

I'm talking about middle class families have seen a $5,200 increase in the real take-home pay. That's a gigantic increase. I mean, it was only $1,100 under Obama. And so, you know, when people say this was just a tax cut that benefited rich people, I mean, come on, look at this. And by the way, this is Christmas season. We see this, just go to the malls, go to the stores, people are shopping, they're spending. Why?

Because they have more money in their wallets. So I'm sure you've heard stories, given all the work that you've done, working for tax reform, all the meetings you've had and, you know, talking to people who have been benefited by it. Are there any particular stories that you've heard from people who have benefited from tax reform that you would like to highlight? Well, one of my favorites, I told this at one of the heritage events, not like that. long ago is that I was in Houston, Texas. This was about a year ago, and I was walking down the street, and this Hispanic woman was walking towards me, and she kind of looked up as we passed, and she kind of grabbed me by the arm, and she said, hey, are you this guy I see talking about economics on TV? And I said, no, that wasn't me, though. I was worried she was going to slug.

But she was very friendly, and she said, well, she said, I'd just like to shake your hand. I said, well, that's very nice. And she said, you know, I didn't vote for Donald Trump. She said, I don't even like Donald Trump very much. She said, but, you know, I just got a $2,000 bonus from my employer. And she said, for the first time, in five years, I'll be able to take a vacation. I was like, wow, this was not about rich people. It wasn't, you know, Trump would always say, rich people can take care of themselves. It was really about how do we expand the economy, so middle class people have those kind of benefits.

And so I was really proud of that, you know, that, and I think you could tell that story a thousand times, everywhere I go. Another quick story. You know, I know a guy named Joey who runs an auto-women. repair shop outside of Cleveland, Ohio. And whenever I go, I'm on the road a lot. Whenever I meet, you know, employers, I always ask, you know, how's business? And Joey said something so interestingly. He said, Steve, it's almost like the day after the election, a light switch was flicked from off to on. And he said, ever since then, I've had more business than I can handle. And by the way, I named the last chapter in my book, Trumponomics, a light switch is flicked from off to on because it's a nice metaphor for what happened with this U.S. economy. I mean, it's not just the tax cut, it's the deregulations, the energy policies. It's just getting government off the back of our businesses so they can do their thing. There are 27 million men and women who run small businesses in this country.

They're the real heroes. Steve, we've heard President Trump talk about these stories himself. Thank you for sharing a couple with us. But you also sense that he's frustrated that there isn't more focus on the good economic news that we continue to hear about. You've worked in the media. Why is this? Well, I mean, they don't, first of all, I think a lot of people in the media are actually rooting against the American economy. We saw this, remember, you know, Rob, for the last three or four months, the media keeps saying, oh, a recession is right around the corner.

The American economy is going to go over a cliff. You know, really? A recession? We just had the best jobs reported. You know, they look really silly today to have said that. You know, we just got 300,000 new jobs in our latest jobs report. If anything, the economy is picking up steam. It's not losing steam.

And so I think a lot of people in the media are just rooting against Trump. And then they understand, look, in a strong economy, it's hard to beat an incumbent president. I mean, he's well set up, you know, for 2020 with a booming labor market, you know, increase. And I'll give you one example. When I graduated from college, the unemployment rate was 10.5%. Today, it's 3.5%. I mean, I never thought I'd see the day when we have a 3.5%. When I was in college, they'd say 4% unemployment rate is full employment.

So we're below unemployment rate below full employment. That's a pretty amazing accomplishment. Steve, you had mentioned earlier that Democrats and those on the left have been talking about the possibility of repealing the tax cuts. How would American businesses and even the overall economy be affected were that to happen? Well, I think it would be a disaster, frankly. First of all, for the stock market, a lot of people smarter than me on this are saying that it would cause maybe a 25% decline in the stock market. That's a giant reduction. You know, they're talking about trillions and trillions of.

dollars of wealth that would be evaporated. Not just for rich people, but people with 401K plans and, you know, union pension funds and so on would be hard hit by that. And then in terms of, you know, the effect on businesses, if you, look, there's an old saying, if you tax something, you get less of it. If you tax something less, you get more of it. If you increase your taxes on businesses and people who are entrepreneurs and start businesses, you're going to get less of them.

I mean, this is just simple mathematics. So I'm very frightened by that, you know, concept, especially when I hear, you know, 70% tax rates, 70% really, we're going to go back to that. And, you know, wealth taxes, they're talking about social security tax increases, gas tax increases. I mean, if it moves, they want to tax it. Steve, the tax cuts and jobs act included many reforms. You advocated for a lot of them. Could you talk about some of the policies that are having some of the greatest impact on our economy today? I think, boy, that's a tough one. I would say two things stick out to me. One is the repatriation tax. So this allowed business.

that had literally there were trillions of dollars overseas that could not come back to the United States because the tax penalty was so high. So we said, well, why don't we just tax them at about 10 percent? Let them bring back the money. We'll get 10 percent of that in revenues. They'll invest it here in the United States. And boy, Rob, that's really worked. I mean, we've got not quite a trillion. I think the latest number is about $800 billion has come back. Think about a number of jobs you can create with $800 billion. So that's number one. Number two, I think, would have to say, you know, cutting the business tax rate to 20%. And one really interesting thing that happened at the very end of the debate, I want to tip my hat to Senator Johnson of Wisconsin, who said, you know, the tax cut for small business is not big enough.

I can't vote for this. You can't vote for it. You know, we need your vote. And we actually went back and we said, gosh, you know, he's right. We're cutting the corporate rate. Let's make sure small businesses see the same reduction. So we didn't just cut the corporate rate to 21%, but virtually every small business now is paying a 21% rate. And as I said, there's 28 million small businesses.

So I think those are the highlights. Americans for Tax Reform has collected over 850 examples of pay raises, new hires, benefits, facility expansions, the list goes on, where tax reform has helped the American worker. And you even mentioned some of those personal stories yourself. Why don't you think we hear more about these victories for Americans? I think, first of all, it's a little, you know, let me give you an example. We at Heritage have found that the average family saves about $2,400 from the tax cut. That's a lot, $2,400. But it's coming in each paycheck.

So, you know, it's about $200 a month or maybe $100 per paycheck. People don't oftentimes recognize that their paycheck is bigger. I think that also the left just takes. Because, you know, the left is very good at just finding a message and just hammering it. So if you ask most Americans, say, oh, that was a big tax cut for rich people, because that's what the media keeps saying. And we need to keep reminding people, no, you've got a $2,400 tax cut. You've got $5,000 more income. You know, you've got more job opportunities.

The great thing about having this tight labor market is that it gives workers a great opportunity to, you know, to bargain for higher wages. And if you don't like working for Joey, you can go down the street and work for Susan. because she's got a job opening too. The number one problem in the American economy today is there aren't enough workers. That's an amazing thing. I mean, that's a good problem to have, right, that you have more jobs than people to fill them. It certainly is. And Steve, finally, as you look ahead to the future, what are some steps that you'd like to see this administration take for Congress?

You should ask that one. That's a slower and right over the middle of the plate. Because as you know, Rob, we are working on tax cut 2.0, and Donald Trump has asked here to put together a plan. I'm working with my friend Adam Michelle over at Heritage and we're putting together some ideas. And one of the ones that Adam has been pushing that really the White House is very enamored with

is the idea of tax-free savings accounts. So this would be the idea that a middle-class family could put as much as $10,000 a year tax-free. So, Rob, you take 10% in $10,000, and you put it into a saving account, either like a 401K plan or something like that. And why is that good? Because we want middle-class people to save more

and to have more for the retirement or more for a rainy day. I think one of the problems in the American account is people aren't saving enough. So this gives them an extra incentive to do that. But that would be kind of a cool thing, I think, the $10,000 universal saving account. And I think the American people would really go for that. Well, we look forward to learning more about tax reform 2.0. Steve, thanks for the work that you do. Thanks for joining us on the Daily Signal.

Tired of high taxes, fewer health care choices, and bigger government, become a part of the heritage. Foundation. We're fighting the rising tide of homegrown socialism while developing conservative solutions that make families more free and more prosperous. Find out more at heritage.org. The Daily Signal podcast is coming to you from the U.S. Treasury Department today. We are joined first by Michael Falkinder, Assistant Secretary of Economic Policy at the Treasury Department. Michael, thanks for being with us. Thanks for having me. You know, we are here at the mark of two years after the passage of the Tax Cuts and Jobs Act. What stands out to you as some of the most meaningful and impactful

ways that this law has changed the American economy? So I think that the Tax Cuts and Jobs Act did two important things. First of all, on the consumer side, on the individual personal side, it really incentivized people to fully engage in the economy, both by decreasing the cost of going to work, by lowering individual tax rates, as well as by putting more money in people's pockets so that they had more to spend in the economy. The second thing it did for us also is that it re-incentivized businesses to locate and expand operations here in the United States. That was done partially by lowering the marginal tax rate

that's applied to business income, but also through incentives for various types of investment. You've heard stories of people who have personally benefited from the tax cuts. Could you talk about some of your favorite stories? I would say that the stories that I hear are mostly people feeling like because they have more money in the pocket, they can do things that they were previously foregoing. So being able to go out and make that new car purchase and replace the one that's been unreliably getting them to work previously or having more money to take their kids on a vacation,

those are the kinds of stories that are really inspiring to us to see the American people being able to fully realize their opportunities. You know, we've heard some efforts on the left who obviously want to repeal the tax cuts. We know what economic consequences that would certainly have. What can you tell us about that kind of impact that you would worry about should that come to fruition? Absolutely. You know, the biggest, I think, unreported story is just how phenomenal the economy has been doing recently. Last year, we had 2.9% economic growth.

The first nine months of this year already, we've had 2.4% economic growth. and remember that this is in the context of an economy we were previously told couldn't get above 2%. In addition, we've got the lowest unemployment rate in 49 years. We're seeing wage growth throughout the income distribution. The census reports measure of income inequality actually declined last year because we're seeing higher wage increases, higher percentage wage increases for production non-supervisory workers than for the average worker, which means that lying employees are getting larger percentage wage increases than their bosses. And so the impact of this has been felt throughout the economy,

and if we were to reverse it, we would potentially move back down to that economy that wouldn't get above 2%, that wouldn't see these kinds of unemployment rates and wage gains that we've been able to realize. President Trump has complained that despite the great economic successes, you're not hearing about any of this in the news. Why do you think this is? I'm not a media critic. It's not my place to analyze how the media reports on it.

Instead, what I do is help people throughout our economy and throughout the Treasury Department have the data and have the stories to go out and tell our side of how well tax reform has impacted the American people. You've talked about some of those stories and how you delight in hearing about people who are able to do things. things maybe that they wouldn't have been able to do because of the extra money they have. What is your counter then to the argument we continue to hear from the left that the Tax Cuts and Jobs Act only benefited the wealthiest of Americans? If you look at the cuts that were made in tax rates, it was across the board. And so a family making $75,000 a year saw a $2,000 tax cut as a result of the Tax Cuts and Jobs Act.

Last time I checked, a family making $75,000 wasn't considered part of the wealthy. But in addition, we have to think about the larger macroeconomic implications of tax reform, and the higher GDP growth we've seen, the low unemployment rates we're seeing, the wage increases, those are not an accident. They occurred as a result of the administration's policies with tax reform at the centerpiece. What aspects of the Tax Cuts and Jobs Act would you say is having the greatest impact today, seeing what you've seen, what would you say if I could highlight one of those aspects of this reform, what would that be?

I would say the most impactful would be the rate cuts, both for individuals as well as for businesses, because, again, when you look at the number of Americans returning to the workforce, right, not only are we seeing really low unemployment rates, record 49-year record low unemployment rates, we're also seeing a return to higher labor force participation. So people are coming off the sidelines and back into the job market.

Part of that's a result of the higher wages they're seeing, but part of it's also a result of the fact that, that when they work, they get to keep more of it as a result of the declines in marginal rates. Couple that with the fact that we've made it more advantageous for businesses to expand, both through lower rates and through various incentives to invest. And it's no surprise that we're seeing a return to high wage growth, low unemployment rates, and reductions in income inequality. Michael, how do we keep it going?

I mean, these last two years have obviously had a number of economic success stories. What steps are you taking here at the Treasury Department or what you'd like to see Congress take to make sure that this happens in the future? Yeah, so the next steps in the President's agenda are really in the continuing on the deregulatory environment as well as negotiating fair and reciprocal trade deals. So we're very encouraged by the fact that Congress has indicated that they're ready to pass USMCA. Likewise, we were extremely gratified to see an agreement on the Phase 1 China trade deal last week. And so the combination of lowering trade barriers, increasing access to markets for American goods and services will allow us to continue expanding this longest on-record economic expansion. Let's delve into those two issues, China and USMCA just briefly. Can you share with our listeners what USMCA is and why it would impact and be meaningful to them? Sure. So USMCA is an important update to the NAFTA trade agreement that was implemented back in the 90s. And it does a number of things. First of all, it modernizes the agreement so that we bring intellectual property up to date. You know, there have been significant advances in the intellectual property component or the contribution of intellectual property, things like software and patents and movies, for instance.

to the U.S. economy, and that was an important missing component in the original agreement. So putting that framework in place is important to enhance our ability to export the types of products and services that create a lot of value here in the United States. Another thing that it does is it brings more equity into some of the manufacturing space, and it also addresses both the China trade agreement as well as USMCA address some of our agricultural product trading relationship. And then China, of course, this president has put that front and center from the time of his campaign in 2016.

I think he's really helped the American people understand what the economic relationship between the two countries is or should be. So talk about the deal and, again, how it impacts the average American. Absolutely. So when China gained entry into the World Trade Organization 20 years ago, there was a hope that that entry would lead towards a set of assets. economic practices that were more in line with what we saw on the rest of the world. And in fact, unfortunately, what we've seen is that there has not been a respect for all of

our intellectual property. There's been forced technology transfers. And there's been, the trading relationship has not been reciprocal. And so addressing some of these trade barriers that will allow American companies and American producers to have access to Chinese markets the way that China has its goods come into our markets is an important contribution to the U.S. economy that the President has led the way on it, that the Secretary played a very pivotal role in negotiating. And so similar to USMCA, the China Trade Agreement, first and foremost is updates our intellectual property

relationship so that there is recognition of the intellectual property that's created by our exports. Second, it significantly enhances the agricultural trading relationship that we have, and it sets a path forward for ongoing negotiation on issues such as forced technology transfer and access of financial services firms to the Chinese market. So the last time that Congress updated the tax code was actually in 1986 with President Ronald Reagan's Tax Reform Act. Why do you think it took so long for lawmakers to review the tax system again and look at reform? I think that with many, I think that with many,

legislative activities, we make major reforms to them once in a generation or once every two generations. So there's, I think what drove tax reform this time was, was the recognition that our tax code had become uncompetitive. You know, I remarked to people regularly that in 1986, when we lowered tax rates back in 86, it brought us into a tax rate that was in the middle of the developed world. So if you look at the OECD nations, the organization of developed economies, the 86 tax reform brought us to a below-average corporate tax rate. We then did nothing to our corporate tax rate essentially for the following 30 years. Yet in that time period, we went from a below-average corporate tax rate to the highest in the OECD. Now you might ask the question,

how did we become the highest if we didn't touch ours? And the answer is, because everybody else lowered theirs. And so it indicated that there was consensus around the world that having high corporate income tax rates that actually discourage job creation and expansion domestically. And in fact, instead, moves business abroad is not to the benefit of the domestic economy. And so what we did with tax reform was simply return the U.S. corporate income tax rate to the middle of the pack of the rest of the developed world so that our businesses could once again be competitive with the rest of the other developed nations. Michael, thanks so much for visiting with the Daily Signal. We appreciate the work you're doing on tax reform, and we look forward

to keeping in touch on the future. Absolutely. Thanks so much for having me. We are joined by Chris Netram, Vice President at the National Association of Manufacturers. Chris, thanks so much for being with us. Thanks so much for having me today. I'm excited to be here. So this is the second anniversary of the Tax Cuts and Jobs Act. Tell us what your message is to the American people here on this anniversary. Look, the Tax Cuts and Jobs Act was a real structural or change in the competitive landscape of the U.S. economy. It moved the U.S. from a position of being really uncompetitive vis-à-vis the rest of the world to just about average with respect to the corporate rate and better than average in many respects. And as a result of that, what we're seeing is a boom in manufacturing.

So since the passage of the Tax cuts and Jobs Act today, we've created about 320,000 manufacturing jobs. These are well-paying jobs that pay on average about $85,000 a year with benefits. They're the kind of jobs that can really support families and communities all across the country. So to have 320,000 created since the passage of the TCJA really shows you how important that that law was. How would you say the Tax Cuts and Jobs Act have contributed specifically to America's economic growth? Well, you know, I think the story of the TCJ is actually told best by the small businesses that we're seeing throughout the country. What we see at the National Association manufacturers is not the stories that you'd see in the headlines of the major media outlets across the country on a daily basis. You know, we've seen the TCJA empower a small business in Denver, Colorado to expand their workforce, give raises and bonuses, but also fund the construction of a shelter for 150 homeless women.

We've seen the TCJA allow a small company in Kansas to go from really struggling to doubling the size of its workforce and investing for growth for the future. And we've also seen the TCJA be credited with helping a small family run company in North Carolina that's been in business for 71 years have its best year ever and use those savings to double their workforce to give raises, to give bonuses, and expand their facilities. I mean, that's the story of the Tax Sets and Jobs Act. Chris, thanks for sharing some of those stories. It's, you know, one thing to talk about the numbers, but when you can actually connect it to the impact that's having on real Americans, you know, it shows that it really is making a difference. You talked about those 320,000 jobs specifically helping manufacturers.

Where in the country is it having the most profound effects, do you think? You know, we're seeing that all around the country. I mean, for geographic distribution, it's hard to say because manufacturing really is everywhere. There are manufacturers in every state and every congressional district in the country. country and the kind of structural changes that we're seeing help the industry writ large. So I wouldn't say that those changes, those positive developments are really confined to any one particular area of the country. Manufacturies is made up of literally everything, right?

There's tech and oil and gas and heavy industrial manufacturing. I mean, we're everywhere doing everything at all times. So I think that the entire country is benefiting from the Tax Sets and Jobs Act. And you saw recently in the most recent jobs report that you had another boost in strong boost in manufacturing jobs, right? After a bit of a lull, it seemed earlier this year. So where do you see things headed in the future specifically with your industry? So, you know, there are a couple of big challenges facing manufacturers. One of them is trade uncertainty.

And we're seeing really positive developments there with USMCA. coming near the finish line, hopefully, hopefully the House and Center to approve the USMCA, that'll bring some real certainty to the North American market, which is huge. There's about 2 million manufacturing jobs that depend specifically on North American trade, so having some certainty there will be helpful. Similarly with China, reopening and renegotiating a relationship that is at times been really unfair to the U.S., especially with respect to the threat of intellectual property, trying to rein in some of those abuses and normalize that that trade will be great.

We're seeing some progress there as well with a phase one deal coming near completion, and hopefully that leads to a phase two that has even stronger protections. So that's one big challenge, and we're heading in the right direction there. The other big challenge is among manufacturing workforce. So there'll be about 2.4 million jobs in manufacturing over the next decade that will go on filled. These are jobs that will be open, will need the bodies, but there will simply not be enough people with the right skills to fill them. That's a challenge. That's a real challenge. So we have an educational workforce partner at the National Association of Manufacturers,

called the Manufacturing Institute. They're developing some really innovating programming to get out there and change the perception of manufacturing. Manufacturing is not what your grandfather may have done. It's not dirty, dark, and dangerous. You're not under a machine with a wrench putting your life on the line. It's really not that. I think of manufacturing more as Ironman and Tony Stark than than getting your hands really, really dirty. So we need to change that perception and we need to get more people into the manufacturing economy. That's the biggest challenge that we're facing. The Tax Cuts and Jobs Act included many reforms, some of which were full and immediate expensing, lowering the corporate rate. What do you say, if you could look at all of those different

reforms, what would you say has been the most impactful for, you know, every day, Americans. Well, look, I think there were five things that we asked for in tax form, and we said if we got all five of those, you would see a boom in manufacturing. So you mentioned two of them, that those were big. Bringing that corporate down to just about average in the industrial world, from worse than the industrialized world to just about average, very positive step, full expensing, anything that allows you to invest in capital equipment is big for an industry that's dependent on machinery, right? That's big. the reforms that were made to help small businesses were particularly impactful.

Reducing the burden on pass-through businesses, very, very big, moving towards a modern international territorial tax system where the U.S. isn't looking to tax every dollar everywhere in the world that you earn. That's helpful as well. It puts us on equal footing with other countries in the world. And finally, having protections for research and development. Now, one thing you may not know is that manufacturers actually perform about 64% of all private sector R&D in the U.S. So making that R&D tax credit permanent really, really huge for us. I think those are the kind of structural changes that will lead to growth for years and years to come. Chris, we've heard in the past how Speaker Nancy Pelosi and other Democrats dismiss tax relief as insignificant.

Pelosi even ridiculed Americans is getting crumbs and nothing more. How would you respond to some of those assessments today, particularly as we hear about efforts on the left to repeal the Tax Cuts and Jobs Act? You know, I think looking to repeal the TCJ is really taking a step backward. Prior to Tax Reform, U.S. manufacturers were fighting with one hand tied behind their back. We were competing against companies based elsewhere in the world that had better rates, that had more competitive systems, and we were weighed down by the weight of a tax code that hadn't been updated in more than three decades. we've modernized that system to create a level playing field. And I don't think that we should go backward.

I think that's the wrong direction to take. So the last time Congress updated the tax code was in 1986 with President Ronald Reagan's Tax Reform Act. Do you think that further work on tax reforms such as tax cuts 2.0 will take another 30 years? I sure hope not. I really, really hope not. Look, we've called for Congress to take a look at the tax code every three years or so. what we've done to make ourselves more competitive is fantastic, but other countries are going to react. They're going to create their own incentives because, look, the U.S. has the best

workforce, the best companies, the most innovative folks in the world. Everybody else wants that too. We're competing against everywhere else in the world. We need to stay on the cutting edge to keep our edge here. Are there specific policies you would like to see this administration or Congress take to do that? Yeah. I think we need to go further on incentive. research and development in the U.S. That is the next generation that that will drive the economy going forward, and we need to be the center of that. What do you think supporters of tax cuts should be doing differently to communicate the good news

that we're talking about today? Look, it's a difficult environment if you support the Tax Cuts and Jobs Act, as I clearly think you should. If you support the Tax Cuts and Jobs Act, it's difficult to. to tell your story. I think it's the major media outlets are not looking to tell a positive story for the TCJA. I think you need to find new avenues to tell your message. Chris, thanks so much for being with the Daily Signal. Thanks so much for having me. I appreciate it. Do conversations about the Supreme Court leave you scratching your head? If you want to understand

what's happening at the court, subscribe to SCOTUS 101, a Heritage Foundation podcast, breaking down the cases, personalities, and gossip at the Supreme Court. The Daily Signal podcast is coming to you from the U.S. Treasury Department today, and we're joined by Ken Benston. He's the president and CEO of the Securities Industry and Financial Markets Association. Ken, thanks for being with us. Thank you for having me. Tell us a little bit about SIFMA.

So SIFMA is a trade association that represents investment banks, broker dealers, and asset managers who operate in the capital markets in the U.S. and abroad. We have about 300 broker-dealer members and 60 asset management members, and then we have a number of associate members. But our core members are, you know, broker-dealers as big as Bank of America, Merrill Lynch, Goldman Sachs, JP Morgan, to big regional firms like Raymond James, to firms like Fidelity Schwab, to really small firms like McDonald's securities, you know, based in Cleveland. And then on the by side, all of the major asset managers, so BlackRock Pemco. fidelity, et cetera. I don't know, leaving anybody out, I'll get in trouble. But our focus is really to represent our members' interest in policy affecting the capital

markets business again in the U.S. and also cross-border. So we are very interested in access to markets abroad, you know, whether it's in our region here in the Western Hemisphere or Europe, Asia, anywhere. Well, we're going to talk about trade specifically, and it's been a topic that's been heavily in the news. Rachel and I will get into some of the details about some of those specifics. But before that, I just want to take a step back so our listeners can understand why it is important to have free trade and access to those markets that you were just talking about. Sure. Well, I mean, I think if you step back and think about just the U.S. economy as a whole,

right? You know, in terms of population, I think the U.S. population represents, what, 5% of the global population, something along those lines. And we consume probably 20% of the global GDP. Those numbers are a little outdated, but more or less that's the ratio that exists. So just on that alone, the U.S. really couldn't operate the way that it wants to and have not just the consumption level, but the capital formation and investment and economic growth. If we didn't have access to other markets, both to sell our goods and services and services is important, and to buy goods and services. So the U.S. is an incredibly trade-dependent economy, but I would argue all economies really are trade dependent at the end of the day. So that's why these agreements

and access to these other markets are so important. So President Donald Trump has been working to pass the USMCA. That's something that's top of mind right now for everyone. Looking at that trade deal, what are some of the most important pieces of it that maybe everyday Americans aren't aware of, but something that they should know so that they can work to support it as well? Well, again, I'll start at the broader sense and then come back maybe some of the things we care about in the financial services sector. From a broad standpoint, and probably people don't think about it a lot,

unless you're from the Rio Grande Valley, which my family's originally fun, for instance, or the Texas-Mexico border area, or if you're from the northern border with Canada, you know, say in the Detroit area, is, you know, there you obviously see the cross-border trade that happens every day in goods, and primarily goods in that instance.

But you probably don't think about it when you go to the grocery store and you're buying vegetables or you go and buy blue jeans or whatever it is and how that manufacturing occurs and how it affects price to the everyday consumer. And you probably don't think about it in the context that Mexico and Canada are two of our largest trading partners. And we are their largest trading partners in reverse on that. So there really is a global supply chain that operates in the Western Hemisphere between Mexico,

the U.S. and Canada that I would argue, and I think the data has proven to be true, has really driven the U.S. economy. So I think that's very important. From a financial services standpoint, and this gets back to sort of why U.S.MCA versus NAFTA. Okay, well, NAFTA was adopted back in the early 1990s, was ultimately adopted in 1994, I think it was, 93, I guess it was. That was a long time ago. It doesn't seem that long ago, but as old as I am getting, I now really,

realize that was a long time ago. And, you know, the world was a different place in that time. So from our standpoint, you know, things like, you know, your broadcast, you know, broadcast over the web, that didn't exist. Now it's, you know, every day. And likewise, the use of, you know, data, the ability to move data around, which is critically important in many industries, certainly important in financial services, there was nothing that dealt with that in NAFTA, let alone in any other trade agreements. And so from our standpoint, USMCA is updating, in many respects, updating NAFTA to where we are today, you know, several decades later. And in the case of financial services, it's addressing a really key issue that came up actually several years ago and other proposed

trade agreements around whether or not jurisdictions should require institutions to maintain data in that location. Seems simple on its face, but actually is, we think, not a very efficient practice. And so this is very important in our view of the updating this, not just as it relates to U.S., Mexico, and Canada, but really broadly for U.S. agreements across the globe. It seems that, you know, after a long delay, let's face it, President Trump signed the agreement over a year ago, there now seems to be bipartisan consensus and we're likely to see passage out of the House and in consideration by the Senate. Why do you think that sometimes it takes so long to get these things done in Washington?

You know, it takes a lot of things, a long time to get things done in Washington. But trade agreements in particular, I think, are very complicated. Because you asked a very important question earlier about, you know, how is it, how does the everyday person sort of understand this and how it affects them? And in many cases, they don't. They don't necessarily think about it when they're in the grocery store, when they're, you know, buying a car or television, whatever the case may be. Or even going to their work and how it's impacting, you know, the supply chain of their business. And the converse of it is that, you know, trade, so trade is very complicated to explain. And furthermore, you know, there are negative consequences that come out of trade,

but largely that's due more to broader economic factors like comparative advantage. And it's very hard to walk into a plant. I can remember actually post-NAFTA walking into a chemical plant along the Houston Chip Channel and talking about comparative advantage and why the petrochemical industry along the Houston Ship Channel was that had actually just overtaken the Germans in terms of petrochemical exports around the globe and why trade was so important.

And there wasn't a person in that room who thought that I made any sense at all. All they thought was, well, these trade agreements are really bad for us. And I was like, that doesn't really match up with your production levels and the growth of your business. But that's the view. So the politics around trade are very complicated. and they are complicated on a bipartisan way.

And so it takes a while to move these things through the Congress and get members to really think about and understand how it's going to affect their constituency and how they can communicate it to their constituency. So China has been a big part of this USMCA trade deal. Why is it important for such a powerful country? They also need to come and play fair at the table. how is that played into this and why is that so important?

Well, look, China certainly is, you know, they've grown, that economy is grown by multiples over the last several decades. And while, you know, they are still not as a, certainly not as a developed economy as the United States or parts of Western Europe, they are certainly no longer a lesser developed country. And so they have to operate under the same rule set that all of the other developed countries do as well as it relates to things like intellectual property and market access. One of the things that we've really focused on,

and the Chinese have inched closer and closer in this direction, is opening up their financial services markets. And we've gone over the past, I'd say, the past decade, from non-Chinese firms, particularly including U.S. firms, you know, broker dealers being able to own, you know, own, I think it was 30% of your business. then it got to 49% of your business. And, you know, there's a big difference between 49 and 51. And they've announced, although they haven't really gotten to allowing to get,

that they would go beyond 49 to 51 and ultimately 100%. And while they've announced that they haven't quite gotten there. So now we feel very positive based upon the announcements that are coming out about this phase one agreement, more details to come for sure, that financial services is included in that. And that's important not just to U.S. being able to go in and operate in China, which is a big market, both institutional and retail, but is also, we would argue, very important to the Chinese because they are still a very bank-dependent, bank balance-sheet-dependent economy.

And that is contrary to the U.S. where, well, we have a lot of bank balance sheet, a very successful banking system, robust banking system, that only accounts for really about a, you know, less than a third, less than 40% of commercial financing because a lot of the commercial financing is really done through the equity and bond markets. And that provides a lot of diversity and has worked very well in the U.S. The Chinese need that to really wean off that bank balance sheet where they have, where it's, you know, they have difficulties right now. So it's in their best interest, we believe, to open up their markets to drive their own capital formation. And Ken, on that last point, I mean,

as you talked about, I mean, it's a complicated issue to talk about to the American people. Of course, going back to his 2016 campaign, President Trump has been talking about China a lot. We know this is phase one. I know that there are future hopes of doing things down the road. You talk about China opening up its market. Do you see the potential of trade to be able to do that? Well, it should. And I think, you know, I think history would show that over the long run, I believe,

economic history shows you're better off opening up your market and having, you know, a more free flow of goods and services going back and forth. And I think the Chinese really need to, you know, make this transition from an export-driven economy to a consumption-driven economy the way the U.S. is. Because they really are, I mean, I remember being, you know, the first time I was in China was in the, you know, was in the mid-to-late 90s, and during the Asian currency crisis, And even then the Chinese economy was growing at a 6% annual growth rate clip, and it was building out a huge manufacturing base and meeting with the governor of the Bank of China,

who was commenting about the fact that while the Chinese were keeping the currency steady, while other Asian currencies were devaluing, that we're still a lesser-developed country. And this is when all the discussions about whether China should enter the WTO were going on or not. And they really weren't, and they certainly aren't today. You know, they're a long way today from where they were back in 1998. And again, if you're going to be a developed country, you really are transitioning to a consumption-based economy

where you want to put more investment in away from this export-driven economy. And the way to do that is through more reciprocal trade agreements. Well, Ken, a lot of news this week on trade. We appreciate you bringing us up to speed on both the USMCA and China. Thanks for being with the Daily Signal. Absolutely. Any time. We're now joined by John Karch. He's the vice president of Communications Americans for Tax Reform. John, it's good to have you on the show. Rob, thank you so much for having me and happy to your anniversary of the Tax Guts and Jobs. That's right. It certainly is. You have done some remarkable work at Americans for Tax Reform

to compile some of the success stories of tax reform. Tell us what some of those are. What are your favorites in your mind? When President Trump signed the Tax Cuts and Jobs Act, on December 22nd, 2017. Immediately you saw that day, and in the days following, you saw companies as a sign of their optimism immediately give their employees bonuses tied to the Tax Cuts and Jobs Act. They knew they were going to have more after-tax income,

and they shared that with their employees. So I gathered those initial examples of the bonuses, but what happened was the good news continued, and people started, companies of all sizes, large and small, raising wages, they were increasing benefits, they were doing a whole variety of things. And so I thought we just need a place to put all these examples because I know the left is going to pretend they don't exist. So we just made a permanent URL at atr.org slash list.

And then we put a call out on radio and TV to have people send in their own examples. So we got in, for example, the Anfinson Farm Store in Iowa, a town of 200 people. The guy raised wages and gave bonuses. and he also increased the paid vacation for his farm store employees. He ended up at the White House with President Trump a few months later as one of the small businesses that benefited from the tax cuts. So now we're up to 875 specific examples. The reason they're powerful is because it's in their own words.

It's not us saying that it happened or we're not saying data. The data is important, but what makes it real is once someone says, look, because of the tax cuts, I was able to hire three more people. I was able to pay for health care for my employees. I was able to, you know, increase the paid vacation or the paid leave. That's really important for people's lives. I have to agree with you, John. I had interviewed a small business owner in Florida, and he had told me that one of his employees,

he only has, I think it's 10 or 15, and he said he was able to, when he gave his one employee a raise, this man was able to buy a car for his wife, and they have two twin girls, and things have been tight for them, and their old car wasn't reliable. And he said, because of that, we were able to buy this new vehicle. So I have to agree with you on there that of the significant differences that's made. Looking at the tax cuts and jobs at and the different pieces to it, what component of tax reform would you say has been most beneficial for everyday Americans, whether it's lowering of the corporate rate, the full and immediate expensing,

is there one thing that you can pull out and say I think this is one of the things that has been most beneficial? Yeah, the income tax cuts. Thanks to the Tax Cuts and Jobs Act enacted by the Republican Congress and signed by Trump, we have the family of four with an average salary getting a tax cut every year right now of $2,000 each and every year. A single parent with one child is getting a $1,300 tax cut each and every year. Democrats want to repeal the tax cuts and jobs acts. So what that means is these families, family of $2,000 tax increase. A single parent with one kid, $1,300 tax increase every year.

On the small business side, you had both the... special small business deduction in the Tax Cuts and Jobs Act. That helps small businesses in terms of hiring and wages. And then on top of that, because most small businesses file on the owner's individual tax return, they also benefit from the income tax rate cut. Now, that family of four with the $2,000 tax cut, that's a 60% reduction in federal income taxes. That's incredible. And you don't hear about it in the news much. All you hear is that this went to the supposed rich people we always hear about. They never tell you about, you know, how families are doing with the tax cuts.

So, Speaker Nancy Pelosi famously said that the American people would only get crumbs as a result of the tax cuts. Now you have some very prominent members of the Democratic Party calling for the repeal of the tax cuts. What is your assessment of their view today and response to some of these calls? You know, honestly, part of it is they believe their own rhetoric. They really believe it was only for the rich. And now, even if they've learned that that's not the case, they certainly,

can't go back and admit that. So all the presidential candidates on the Democrat side have either called for outright elimination or they just say we're going to eliminate most of it. Biden said, he goes, I'm going to eliminate most all of it, just you wait. So I want to point something out on the corporate side, which another thing the media doesn't talk about, because we took the corporate rate from 35 to 21, we're not only competitive internationally now, but utility companies, think your water bill, your gas bill. your electric bill, these investor-owned utilities, they're by law required by the state utility commissions

to lower their rate because they pay the corporate rate. So they have to actually lower their rate that they bill the customers at. So families and small businesses, large businesses, anybody with any utility bill is actually saving a lot of money. So every time a Democrat is out there saying, you know, we really got to take that corporate rate up to 25 or 28 or 38 or whatever they want to take it to,

your utility bills are going up. So that's something we can throw right back at him. The last time the tax code was updated, it was in 1986 with President Ronald Reagan's Tax Reform Act, and Congressman Kevin Brady of Texas, he said that he wants to see tax reform 2.0 happen. Do you think it's going to be another 30 years, or do you think we'll have more movement on tax reform in the near future? No, I think as long as we have Brady in there and Trump in the White House, and if we can win the House back, I think we're going to have a tax cut every year. and I think Americans are seeing the power of the tax cuts and they're not going to take kindly when, you know, when some of these expire on the personal side, it's why it's so important we do need to get, you know, people in there that believe in tax cuts.

So another thing I wanted to point out is the tax cuts had in there this Kraft Beverage Modernization Act. So you're seeing this American Renaissance in beer brewing and winemaking and, you know, more distilled adult beverages across the country. And everybody loves their local brewery or winery. And thanks to the tax cuts, they got a significant tax cut for the smaller breweries. So that's been huge. Tons of people hired new facilities on Main Street. So it's fun to see it. Everybody likes beer or wine or other.

So hopefully we'll see that extended. John, you talked about some of the things you'd like to see in the future. Of course, one of the things that ATR has done in the path that has had such a meaningful impact on taxes is the taxpayer protection pledge. As we close out the interview here, share with our listeners about that and the impact that it's had, particularly on those who are running for office. Taxpayer Protection Pledge allows a candidate to communicate clearly with their voters that there's a red line when it comes to tax increases. They're not going to vote for a tax increase. typically when a Democrat is running for office, they say, gosh, you know, I'd hate to raise taxes, or that's the last thing I'd want to do. But that was not a pledge against a tax increase.

They just kind of meandered about it out loud. So this is a clear line in the sand that you will not raise taxes if you are elected. About 90% of the House and Senate elected Republicans have signed it. No Democrats anymore. We used to have a couple Democrats, but they're not, low-tax Democrats aren't really a thing anymore. So, yeah, it's been there since 1986, and we encourage all candidates for, federal and state office to sign it. Well, John, thanks for the work that you do at Americans for Tax Reform.

We appreciate you joining the Daily Signal. Awesome. Thanks so much, Rob. We're joined by Adam Michelle. He's a senior policy analyst at the Heritage Foundation. Adam, thank you so much for being with us today. Thanks for having me on. So we're coming up on the two-year anniversary of tax reform,

and you have worked a lot on this issue, and a lot of your recommendations have been to the White House and have been incorporated into tax reform. And so looking now two years later, how would you say the tax cuts have impacted the American economy? I think the impact has far surpassed what most people expected going into it. There's a lot of news stories out there that would lead you to believe the opposite. But if you look at the sort of fundamentals of the economy, everything is continuing to trend in a pretty phenomenal direction.

We have the longest running period of businesses adding new jobs to the economy. I think it's 110 consecutive months at this point. Wage growth is tremendous, not just for the average American family. It's above 3% over the last year, but for lower income wage earners, people earning about $12 an hour, they saw over the last year a $1,500 raise. That's a 7% increase. This is unheard of at this point in an economic recovery. So you sort of tick down the list. unemployment, wages, new jobs, it's all pretty phenomenal.

Adam, I'm sure you've heard stories of people who have personally benefited from the tax cuts. Could you talk about some of your favorites and what it means to people who don't necessarily get the attention on a day-to-day basis that the Democrats or the media would like to necessarily point out? Yeah, well, at Heritage, after the tax cuts passed, one of the things that we did, we actually went out to fairs. and out into communities to talk to people about what they were doing with their tax cut money. And I had like several pictures emblazoned in my memory of we had this sign that said, like, what did you do with your tax cut? And people wrote what they did with it. And there's like several folks at a fair in sort of, I think it was rural Ohio or something,

holding signs like, I gave my tax cut to my church, or I gave my tax cut to my local charity. Those are the, I think it's more than just how much money you have in your pocket, but it's the generosity of Americans across the country. It's not, when you get to keep more of your own money, it's not just you the benefits, it's your community, it's your kids. It's just, it snowballs beyond what anything, anything that Washington could provide through a handout or through a welfare check. And that's, I think that's the power of putting money, back in the hands of the American people that makes me so passionate about tax cuts and keeping them, making sure that they're permanent for years to come.

The Tax Cuts and Jobs Act included a bunch of reform. Some of them were the lowering the corporate rate, full and immediate expensing. Are there, is there a specific element to the Tax Cuts and Jobs Act where you say this has really helped the American economy that you like to highlight? Well, I think two years later, it's most people. People have probably forgotten all of the specifics that were included in tax cuts. And so whether or not it was lowering marginal tax rates on people's income across the board, or doubling the child tax credit, doubling the standard deduction,

that's the 0% rate for most folks. These are all tremendous benefits to individuals. But the two things you hit on, expensing and lowering the corporate rate are the things that are really leading to the economic boom that we're seeing. the jobs that we talked about, wage increases being higher than they have been since before the Great Recession. And that's when businesses send less of their money to, less of their profits to Washington, they can reinvest that in new equipment, in larger factories, in new research and development. And these are all the things that ultimately feed into workers across America having better equipment to work with

and being more productive, which ultimately leads to wage increases. And that's the sort of economic story that's happening. So that lower corporate tax rate incredibly important, but all the individual pieces for your sort of typical family were also incredibly meaningful. Adam, some on the left have suggested that they would, if given the chance, repeal some or all of the tax cuts. How would American businesses, workers, and just frankly the overall economy be impacted if that were to happen? I think it would take our economy to a standstill. The tax cuts are what, I think, continuing the economy to grow at the rate that it is,

and rolling that back not only signals to businesses that they have less money to work with, but to American families, they have less money to spend. The government is going to start taking more and more of what they earn. We, at Heritage, looked at what repealing the tax cuts in 2020, so next year, looks like for every congressional district, around the country. And if you pair the lower wages that you get from raising the corporate tax to the actual tax increase that families have, those two paired together, you're looking at a typical family of four being between $10,000 and $100,000 worse off over the subsequent

decade. There's a lot of variation across congressional districts, but in every single congressional district, people are poorer if the tax cuts are repealed. And so that's why we need to make them permanent. That should be where Congress is focusing. Adam, you recently had a piece in the Daily Signal talking about how minorities have been so well served by tax reform. And you highlight that lower-wage black workers are seeing wage growth of 8.5% and similar low-wage black women seeing gains larger than 10%. What has this meant for these Americans? It means they have more money to live their lives, to support their children. children to put food on the table, to fix their refrigerator when it breaks down. You sort of go

down the list. Higher wages mean people can live better lives and can support themselves and their community. And I think that's the untold story of a good economy, of tax cuts in general. But when the economy is doing really well, it's people that are historically left behind that see the biggest wage gains that have, frankly, the most to lose if all of this were to go away. And that's why it's so important to be laser-focused on a pro-growth agenda, something that keeps the economy growing like it is. It's not just for people that live here in Washington, D.C. We're in D.C. today. It's all of the Americans out across the country who depend on that job. and those wage increases. And so that's why the deregulatory agenda, making tax cuts permanence,

all of this feeds into supporting American workers. So, Adam, as you look ahead to the future and that pro-growth agenda, what is tax reform 2.0 look like? What are some of the other policies that you would like to see both this White House and Congress implement? I think that the most important piece is making what we got permanent. The tax cuts, unfortunately, start expiring in in 2022 and then 2025 is sort of the big cliff where taxes will automatically go up if Congress doesn't do anything. So making what we got permanent. And then I think we can expand on that. One of the big things that I've been an advocate for is a universal savings account. So right now we allow people to save for retirement in your 401K or your sort of Roth IRA accounts. But

basically that system is telling people to only save for retirement and not save for anything else. savings account says you should save for something other than retirement. You should save for your next car, for helping your kids go to college, or whatever those life priorities are. And I think this is the opposite of the left's agenda. The left is looking at how they can increase taxes on savings and investment, things that will ultimately cripple the economy. And so it's expanding the tax cuts we got, adding universal savings accounts, and then helping businesses invest even more in the United States to support American workers through expensing that we mentioned earlier. And I think that puts together a really strong pro-growth tax agenda, along with continuing

deregulation, increasing free trade, all these things work together. Adam, you had mentioned that a lot of the gains we've seen from tax reform aren't front-page news, basically, ever. And so how would you suggest supporters of tax cuts be doing differently to communicate the good news? That's a really great question. I think it's about talking to your neighbor and talking to people that are experiencing the good economy. When I was out in North Carolina talking about tax cuts, and after our talk, several people came up to me and said, hey, I just wanted to let you know that I got an email from, I think it was a guy that worked at Verizon. I got an email from my boss saying, you have a bigger paycheck.

after tax reform went in. And I knew I could use that money to enroll my daughter in so she could play in the soccer league she wanted to play in. And that meant a lot to him in the way you could see it in his eyes. And so I think it's communicating those stories to folks that maybe aren't hearing them that I think is most powerful. Sure, we can read about it in the news. That's important. But the word of mouth talking about how important is to live in a strong economy with the people around you is the biggest thing we can do and something we can do going into the holidays. Well, Adam, thank you so much for being with us today on the Daily Signal podcast.

It's always a pleasure to have you. Thanks for having me on. And that'll do it for today's episode. Thanks for listening to The Daily Signal podcast. Please be sure to subscribe on iTunes, Google Play, or Spotify. And please leave us a review and a rating on iTunes to give us any feedback. The Daily Signal podcast is brought to you by more than half a million members of the Heritage Foundation. It is executive produced by Rob Blewey and Virginia Allen.

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