After the 2017 Trump tax cuts, working Americans saw their real wages rise at the fastest rate in 20 years. 

WASHINGTON, D.C. – Small business tax relief and a more competitive tax code was the fuel for higher paychecks following enactment of the 2017 Trump tax cuts. Real wages rose 4.9 percent in 2018 and 2019, the fastest growth in 20 years. Workers not only had bigger paychecks, America enjoyed the lowest poverty rate in U.S. history and the lowest unemployment rates ever for African American and Hispanic workers and those without a college degree. 

Under the Biden-Harris economic policies, working families are worse off today. The average paycheck is worth 3.1 percent less than when the Biden-Harris Administration took office. To make ends meet, credit card debt is at historic highs, savings accounts are drained, and more Americans are getting second or third jobs. 

Ways and Means Committee Chairman Jason Smith (MO-08) issued the following statement: 

“The Trump tax cuts were blue-collar tax cuts for America’s working families. Workers in the bottom 10 percent of incomes saw a 50 percent higher wage growth than those in the top 10 percent. In over 120 listening sessions across 20 states, Ways and Means Tax Teams have heard firsthand how the pro-growth Trump tax cuts benefited workers. The economy created 5 million new jobs. While Nancy Pelosi sneered at higher paychecks for workers as just ‘crumbs,’ the truth is workers saw real growth in their wages that helped them provide for their families. President Trump was given a mandate by the American people to create more good-paying jobs here in America. Ahead of the 2025 tax cliff, Ways and Means Tax Teams are working to turn that mandate into relief for workers who watched the value of their paychecks shrink because of Bidenflation and Bidenomics.”

VIDEO: Trump Tax Cuts: Making the Economy Great Again

Through listening sessions and site visits, the American Workforce Tax Team led by Rep. Darin LaHood (IL-16) and the Main Street Tax Team led by Rep. Lloyd Smucker (PA-11) have heard how the Trump tax cuts benefited workers and small businesses. The 20 percent small business deduction helped those businesses expand operations, hire new workers, and give raises. These pro-growth tax cuts combined with the income tax cuts allowed workers to keep more of their hard-earned paycheck. 

FACTSHEET: Key Individual Tax Policies from the Trump Tax Cuts Set to Expire Across America

Message to Washington 

In committee hearings held outside of Washington, D.C., American employers have told the Committee how following the Trump tax cuts, they finally had the means to invest in their businesses and raise wages for their workers.

Hearing on Pro-Growth, Pro-Worker Tax Policy | Iowa State Fair

Rep. Adrian Smith (NE-03): “In the run up to the 2017 tax reform, it’s important to note that even Barack Obama realized we were not competitive on the corporate side…As the Chairman pointed out, we were losing American companies to relocation to other tax jurisdiction because it was more favorable…Can you elaborate on what you did with that 21 percent rate?”

Karen Dewalt, Home Depot tax executive: “The decrease in the corporate rate, that was 35 [percent], down to 21 [percent] created an opportunity for us to really double down on investing in our business. We did so with our supply chain expansion, which increased our footprint, created jobs, and helps us to better serve our customers. We also took care of our associates…We increased wages by a billion dollars – permanent wage increase in 2021 and then a second billion dollar wage increase announced last year. Those are permanent. Not bonuses, but wage increases.”

Rep. Claudia Tenney (NY-24): “Most of the businesses, as Ms. Pol said, in our communities are driven by small business owners, including our farmers. And so, we are just grateful to all of you for putting it in your words exactly what the catastrophic results could be if we don’t continue with these issues… But you talked about 199A, if it should expire, could you tell me just briefly what the operational changes you would have to make in the business if that were to happen?”

Lana Pol, small business owner: “Well, currently, I think what we would do is stop investing, you know. We wouldn’t be able to expense the equipment, you know. We wouldn’t have the extra money to reinvest into our employees and anything else that we wanted to pursue.”

Hearing on Creating Opportunity in the Rust Belt | Erie, Pennsylvania 

Tom Tredway, Pennsylvania manufacturer: “The pro-growth tax strategies from the TCJA put us in a better position to thrive. We had good things going our way. Having incentives to do research and development, having incentive to make capital investments that we need as a small business to compete both domestically and internationally, all allowed us to put more money back into our employees, back into our company.”

VIDEO: Stopping a Tax Hike on Every American

Pro-Worker Record of the Trump Tax Cuts
Working Americans experienced greater financial security and prosperity following the 2017 Trump tax cuts.

• In 2018 and 2019, wages increased 4.9 percent, the fastest 2-year growth in real wages in 20 years.
• Workers in the lowest 10 percent of income saw 50 percent higher wage growth than those in the highest 10 percent.
• American families’ net worth increased 37 percent in the 2 years following the passage of the Trump tax cuts. 
• The Trump tax cuts resulted in the lowest poverty rate in U.S. history – including all-time lows in unemployment for African American and Hispanic workers and those without a college degree.
• The Trump tax cuts added nearly 5 million jobs to the economy prior to the pandemic.
  

READ: Ways and Means Tax Teams