forbes.com
TCJA Expiration Risks Severe Economic Hardship
The 2017 Tax Cuts and Jobs Act (TCJA) positively impacted small businesses, creating jobs and boosting wages, but its expiration could result in a 22% average tax hike for individuals and a 43.4% top rate increase for 26 million small businesses, potentially causing significant economic hardship.
- What were the immediate consequences of the 2017 Tax Cuts and Jobs Act (TCJA) for small businesses and the overall US economy?
- The 2017 Tax Cuts and Jobs Act (TCJA) enabled Geetings, Inc., a trucking and warehousing company, to expand operations, buy new trucks, and raise driver salaries. Similarly, Iowa corn farmer Jolene Riessen used expanded depreciation benefits to afford crucial combine repairs, avoiding a costly replacement. These examples show the TCJA's positive impact on small businesses.
- How did the TCJA's provisions, such as expanded depreciation benefits, specifically impact small businesses like Geetings, Inc. and Jolene Riessen's farm?
- The TCJA's impact extended beyond individual businesses, contributing to a 4.7 million job increase, a 50-year low unemployment rate (3.5%), and the fastest real wage growth in 20 years within its first two years. However, subsequent economic challenges like COVID and inflationary policies negatively affected this progress.
- What are the potential long-term economic consequences if Congress allows the TCJA provisions to expire, considering the projected tax increases for individuals and businesses?
- Allowing TCJA provisions to expire would severely harm businesses and workers. The average taxpayer could face a 22% tax increase ($1,695 for a median family of four), while 26 million small businesses would face a higher top tax rate of 43.4%. This could lead to business closures and economic downturn.
Cognitive Concepts
Framing Bias
The narrative strongly emphasizes the positive experiences of small business owners under the TCJA, using their stories as the central focus. This framing prioritizes anecdotal evidence over broader economic analysis, potentially influencing readers to view the TCJA's impact positively regardless of other economic indicators. The headline (not provided, but inferred from the text) likely reinforces this positive framing. The repeated use of phrases like "tremendous increase" and "everything seemed to start flowing a lot better" contributes to a positive bias.
Language Bias
The article employs language that leans towards a positive portrayal of the TCJA. Terms like "tremendous increase," "help out there," and "critical" are used to describe the impact of tax cuts, which are emotionally charged words. While not overtly biased, these choices frame the narrative in a way that favors the positive aspects. More neutral alternatives could include 'significant increase', 'assistance', and 'important'. The repeated use of 'massive tax increase' in the conclusion further intensifies the negative framing of potential tax hikes.
Bias by Omission
The article focuses heavily on the positive impacts of the TCJA on small businesses, featuring anecdotal evidence from business owners. However, it omits discussion of potential negative consequences of the TCJA, such as increased income inequality or the long-term effects on the national debt. While acknowledging limitations of space, a more balanced perspective would include counterarguments or at least mention the existence of differing viewpoints on the TCJA's overall impact.
False Dichotomy
The article presents a false dichotomy by framing the debate as a choice between maintaining current tax rates (implying continuation of TCJA benefits) and a return to pre-2017 rates. This oversimplifies the complexities of tax policy, ignoring the possibility of alternative tax structures or incremental changes. The framing positions readers to see any tax increase as inherently negative without exploring the potential benefits of alternative tax policies.
Sustainable Development Goals
The 2017 Tax Cuts and Jobs Act (TCJA) led to job growth, decreased unemployment, and increased wages. The TCJA enabled businesses to expand, invest in equipment, and provide raises. The article highlights the positive impact of tax cuts on small businesses, allowing them to thrive and contribute to economic growth. The potential reversal of these cuts is presented as a significant threat to this progress.