News & Updates
January 19, 2018

Tax Cuts Have Worked in the Past and They’re Working Now

Along with the passage and implementation of the Tax Cuts and Jobs Act, there has been some skepticism in the main stream media of whether the financial relief will trickle down to Main Street. To answer that question, we don’t need to look further than the past.

Below are three examples of how past tax cuts packages have led to economic growth and job creation:

  1. The Kennedy Tax Cuts: President Kennedy called for a $13.5 billion tax reduction in 1962, but it was initially blocked by Congress. However, it was eventually passed by his successor, President Johnson, after his untimely death. The policy ended up contributing 6.2 percent to economic growth, as well as creating 9.3 million new jobs.
  2. The Reagan Tax Cuts: Two tax cuts were signed into law under the Reagan Administration—one in 1981 and the other in 1986. Together, the two pieces of legislation cut taxes for roughly all Americans by 25 percent and simplified the tax code. The result was economic expansion of over 11 percent and the creation of 11.7 million jobs.
  3. The Bush Tax Cuts: President George W. Bush signed two tax cuts into law as well—the first in 2001 and the second in 2003. The combined effect of both tax relief bills increased the after-tax income of Americans by between 1 and 6.7 percent—which contributed 2.3 percent to economic growth and created 6.9 million jobs.

Similar job creation and economic expansion that occurred because of these past tax cuts are bound to happen again. In fact, over two million Americans have already benefited and are proof that the legislation is working.