Low-income people aren’t being helped much by the new tax law, according to a new survey by a website catering to pawnshop customers.
Low-income Americans were only barely aware of the new tax law. While nearly nine-tenths of the respondents claimed to read or watch the news, and half were aware of the new tax law, only one-third knew any details of the legislation. Of those who were comfortable replying to this question, only 30 percent saw a representative of the GOP defend the law.
“While 88 percent of the population in the sample claimed to read or watch the news, only 51 percent were aware of the new tax law, and only 35 percent reported any details,” said PawnGuru co-founder Jordan Birnholtz. “About a third of the people were uncomfortable replying to the question when we asked, ‘Did you ever see a representative of the GOP defend the law?’ Only 30 percent said that they have, which was surprising to us.”
PawnGuru is a startup that allows people to post items they want to sell, buy or get a loan on from a pawnshop. It’s aimed at unbanked and underbanked users. Over 30 percent of PawnGuru’s users are unemployed, and the rest are largely low-income. Although half the respondents to the survey are either unemployed or make less than $20,000 a year, only 35 percent said they are on SNAP or Medicaid.
“The tax law isn’t helping workers,” said Birnholtz. “Workers are barely aware of the law, and it’s really hard for people who need help to get it.”
He isn’t sure what the impact the new tax reform law will have on the midterm elections in the fall. “These are folks who don’t feel any allegiance to the GOP or any sense of gratitude,” said Birnholtz. “It’s not clear to me what extent Democrats will capitalize on their lack of satisfaction or lack of knowledge about the tax law. This is a population that is likeliest to vote when they are the subject of frequent contact by their friends and by their community to remind them to vote.”
However, Republican lawmakers are pointing to some signs of success. The House Ways and Means Committee held a hearing Wednesday at a hearing on how tax reform was growing the economy and jobs. Ways and Means Committee chairman Kevin Brady, R-Texas, who was one of the main architects of the new law, cited some positive data from the Congressional Budget Office.
"In August of 2016, CBO projected that GDP growth would slow to 2.1 percent by the end of 2018,” he said. “Our families and workers deserved better than that slow growth status quo. And now, thanks in large part to the Tax Cuts and Jobs Act, the economic outlook for America has dramatically improved. Already in the first quarter of 2018 we are seeing actual growth of 2.9 percent. And CBO projects that this will accelerate to 3.3 percent by the end of 2018. Before the Tax Cuts and Jobs Act, CBO projected investment would grow to 4.4 percent in the first quarter of 2018 — after tax reform, CBO revised its projection to 5.6 percent for that same quarter. And the data now shows that investment actually grew 6.1 percent in the first quarter of 2018 — even higher than CBO’s revised projection. Looking forward, CBO has also estimated that the Tax Cuts and Jobs Act will create 900,000 jobs, raise wages by $1.2 trillion, and boost investment by $600 billion.”
Brady added that consumer confidence has risen to its highest level since 2000. “The National Federation of Independent Business April 2018 survey shows small business confidence in the economy is near all-time highs,” he said. “In addition, the percentage of small businesses that reported seeing profit growth is the highest in the 45-year history of the survey.”
However, Rep. Richard Neal, D-Mass., the ranking Democrat on the Ways and Means Committee, disputed the success of the new tax law. "Mr. Chairman, when you began the process of tax reform, Democrats were very clear in reminding you that trickle-down economics simply does not work," he said. "If you didn’t believe us then, I hope you’ll believe us now. Since passage of the tax law, we have all watched as record stock buybacks have lined the pockets of the elite, as companies stated publicly that their tax cut is funding the offshoring of American jobs. One American corporation even went as far as admitting openly that your tax law gave them the money to lay off more than 5,000 U.S. workers. That’s 5,000 families whose lives will be upended by your irresponsible law."
