WASHINGTON, D.C. – At a recent Ways and Means Committee Tax Subcommittee hearing on how the Working Families Tax Cuts benefit hardworking Americans and small businesses, Republican witnesses – an adoptive father, small business owner, restaurant server, and steelworker – shared how the new tax relief in the Working Families Tax Cuts personally benefitted them and millions of other working Americans. Meanwhile, the lone Democrat witness began her testimony by calling on Congress to “raise taxes”, a position that aligns with all House and Senate Democrats who voted to increase taxes by an average of 22 percent on every taxpayer. 

The Working Families Tax Cuts provided the largest tax cut in American history and delivered new tax relief targeted to low- and middle-income households through policies like No Tax on Tips, No Tax on Overtime, No Tax on Social Security, No Tax on Auto Loan Interest, an increased Child Tax Credit, a doubled standard deduction, Trump Accounts, an enhanced Child and Dependent Care Tax Credit, and $5,000 of the Adoption Tax Credit made refundable so more middle-class families benefit from this crucial support. 

The Working Families Tax Cuts led to a record tax refund season and put more money in Americans’ pockets:

• Average tax refund was up 11 percent and taxpayers saw total tax relief top $310 billion. 
• A family of four with two children making $73,000 owed no federal income tax.
• 7 million Americans claimed No Tax on Tips with an average deduction over $7,000.
• 28 million Americans claimed No Tax on Overtime with an average deduction of $3,100. 
• Over 34 million families claimed the Child Tax Credit that was increased to $2,200 and permanently indexed for inflation so the credit never loses value. 
• Over 105 million filers claimed the enhanced standard deduction.

VIDEO: GOP Tax Cuts Help Texas Maintenance Worker Start a Family

“Are You a Billionaire?”: Working Families Tax Cuts Benefit Regular Americans

Democrats repeated their same tired talking points that the Working Families Tax Cuts benefit billionaires. Chairman Smith tested the truth of that claim at the hearing by asking the witnesses, who each testified to the substantial relief they saw after filing their taxes this year, whether any of them were billionaires. The truth is the Working Families Tax Cuts increased the share of all federal income tax paid by the top 1 percent while the average family of four earning up to $73,000 now owes no federal income tax. 

Chairman Jason Smith (MO-08): “Every single Democrat in the House and the Senate voted against these proposals, because they said it was helping billionaires. 

“I want to ask a question. Raise your hand if you’re a billionaire.”

[ZERO hands raised.]

“On Behalf of All the Servers, Thank You.” 

An Arizona restaurant server testified how his $4,000 tax refund, increased by No Tax on Tips, allowed him to apply to law school. He shared that other servers at his restaurant were excited by tax relief in the form of No Tax on Tips. 

Rep. Mike Kelly (PA-16): “The people that you work with every day, and whenever we came up with this Working Families Tax Cuts – what was the feeling?…If you could share that story with us, because I got to tell you it’s so personal, and it’s what this bill was about.”

Sultan Stipho, Arizona restaurant server: “For servers specifically…the fact that we got to keep more of our tips, because when tips are meant to be a thank you, getting to keep a little more of that thank you and not having to be taxed on that was helpful…Honestly, everyone liked it, and they were very, very happy with it. I think on behalf of all the servers, thank you all, and we’re very, very grateful to have No Tax on Tips.”

Real Impact of Working Families Tax Cuts: Starting a Family, Buying a Home, Beginning a New Career

The Working Families Tax Cuts put more money in people’s pockets with Americans receiving an average refund of nearly $3,300 this tax season. Witnesses shared how the extra money has allowed them and others to achieve major life goals.  

Rep. Ron Estes (KS-04): “Can you talk about opportunities that you have to utilize that money for education, for home ownership, for family life, for your regular day-to-day businesses, or regular everyday expenses?”

Jason Alexander, Texas maintenance worker: “Personally, me and my wife, we plan on having children soon…and it’ll be very helpful moving forward.”

Darcy Michalek, Nebraska small business owner: “One of our stylists told me that he saved every tip that he had for one year for a down payment on a condo, and a year later he was able to purchase that. I think that the tip portion of this bill was really important. I think just allowing them to keep more of that allows them to make those investments in themselves, which is critically important.”

Sultan Stipho, Arizona restaurant server: “The nature of this restaurant industry, for tipped workers, is one that’s kind of variable…Having this refund come around mid-March it was, think was like February, and the middle of my preparation for the LSAT exam meant that I could take a little breather. I could actually study, not have to worry about work for a little while, because of that refund coming back to me.” 

Enhanced Adoption Tax Credit Helps More Families Experience Joy of Adoption

Thanks to the Working Families Tax Cuts, the first $5,000 of the Adoption Tax Credit is now refundable to help low- and middle-income families afford the cost of adoption. Republicans delivered a number of other pro-family tax cuts including increasing the Child Tax Credit and making the Child and Dependent Care Tax Credit more accessible to low-income families. These policies help Americans grow their family and provide children a safe, loving home, as discussed by a hearing witness who will be claiming the larger Adoption Tax Credit to defray the adoption costs for his second son.  

Rep. David Kustoff (TN-08): “In terms of other parents who are looking at adopting, this new tax law does provide incentives, doesn’t it?”

Clark Saunders, Texas public school teacher and adoptive father: “It makes it where it feels like it’s something that can be affordable to a family. If you’re talking about $30,000 to invest in your family, that’s paying for an entire car, just to start to have a child, and even that comes with risks where sometimes placements don’t happen. Sometimes you incur even more costs. Having the ability to not have to sacrifice as much to have that standard of living for your family is super helpful…Being able to apply that Adoption Tax Credit for our second son will be a huge benefit to our family.”

Boosted Standard Deduction Simplifies and Cuts Taxes for 90 Percent of All Taxpayers

The Working Families Tax Cuts grew the standard deduction by $1,500 per family to $31,500, which simplified tax filing for the 90 percent of taxpayers who claim the deduction and cut taxes for many. Families will experience $205 billion in new tax relief on top of the increase in the 2017 Trump tax cuts.

Rep. Beth Van Duyne (TX-24): “In your expert opinion, how beneficial is the permanent, boosted standard deduction for middle-class workers in terms of things like reporting requirements from itemizing and keeping their hard-earned income?”

Don Schneider, Deputy Head of U.S. Policy, Piper Sandler: “It benefits about 90 percent of tax filers…It dramatically simplified filing for the majority of tax filers and provides annually about $12 to $18 billion in tax relief for all of those individuals.” 

…

Rep. Van Duyne: “You’re telling me that we’re actually simplifying filing of taxes?…Are more people getting to keep what they make?…And are larger tax returns being given to the American people…And that was as a result of this bill?”

Schneider: “Correct.”