1 Year In, What Has President Trump Done to Help Middle-Class Americans?
Much has changed with President Trump’s Tax Cuts and Jobs Act of 2017. As many of us already know, the bulk of the gains will go into the pockets of the upper class and corporations. But luckily, the middle-class will reap some of the benefits, if only for a while.
Let’s take a deeper look into how the middle-class benefits from the GOP’s tax bill, along with the backlash that could eventually come. We’ll also look at how some of the Trump administration’s other policies have affected the average American. Here’s what President Trump has done to help middle-class Americans since his inauguration.
1. Increased the standard tax deduction
With President Trump’s new Tax Cuts and Jobs Act of 2017, nearly everyone who takes the standard tax deduction for the 2018 tax year will experience a tax cut. And the idea behind the increased standard deduction is to offset the removal of itemized deductions and personal exemptions. The new standard tax deductions and lowered tax rates should leave more money in the pockets of many middle-class workers, for now.
2. Expansion in the child tax credit
For middle-class workers with children, the benefit of the expanded child tax credit is impressive. For starters, the credit has doubled from $1,000 to $2,000 per child. Previously, if a tax filer didn’t have any taxable income, the child tax credit couldn’t be received. That’s no longer the case. Of the $2,000 credit, up to $1,400 is refundable.
3. More money in the pockets of the middle-class, at least until 2025
Tax rates are lowered, the standard deductions have increased, and so has the child tax credit. These factors combined translates to more money in the pockets of middle-class workers. But this won’t last forever. Unless these three tax breaks are extended, they will expire on December 31, 2025. And unfortunately, that means the majority of the middle-class will experience tax increases by 2027.
4. Jobs continue to be added to the labor market
In 2017, the growth of employment and job creation averaged 174,000 per month. And as many of us know, this was a huge part of Trump’s campaign message.
On September 19, 2017, President Trump claimed, “Companies are moving back, creating job growth the likes of which our country has not seen in a very long time.” Whether Trump is solely responsible for any upticks in job creation or not, the good news is that the labor market doesn’t appear to be shrinking as a result of the Trump administration.
5. Unemployment is at its lowest since December 2000
It’s true. The average unemployment rate is hovering at 4.1%, making it the lowest it has been since December 2000. No doubt, this is something to write home about. And ideally, the labor market will continue to experience growth, which inevitably aids in low unemployment numbers.
6. A closer look at job growth
While it’s important to give the Trump administration credit where credit is due, it’s also important to highlight what’s actually been going on over the course of the past few years. As many of us know, drastic changes usually don’t occur overnight and such is the case with job creation and growth in the Trump administration.
In 2016 (under the Obama administration), an average of 196,000 jobs were added each month. Under the Trump administration in 2017, an average of 170,000 jobs were added each month. And while it’s likely that President Trump’s administration will bolster more job growth, it’s important to know his administration has not completely reinvented the wheel.
7. A closer look at the unemployment rate
Under the Clinton administration, the unemployment rate hit an all-time low of 3.9% in December 2000. After the Great Recession, the rate skyrocketed to 10%. But as the economy started its recovery process, the Obama administration diligently worked to bring it down again. By the time President Obama left office in January 2017, the unemployment rate was 4.8%.
Trump supporter or not, most of us can agree that President Trump and his administration are not solely responsible for this impressive drop in unemployment.
8. Looking forward to wage growth in 2018
In light of all the Trump administrations so-called victories, wage growth has stagnated. And luckily, this has been acknowledged within the Trump administration.
Kevin Hassett, the chairman of the president’s Council of Economic Advisers told NPR, “Wage growth was not as strong as we’d like to see it… We fully expect that that’s going to accelerate next year if the tax bill passes.” Now that the tax bill has passed, all Americans can hope to see wages grow.