WASHINGTON, D.C. – House Ways and Means Committee Chairman Kevin Brady (R-TX) and Tax Policy Subcommittee Chairman Peter Roskam (R-IL) released the following statements today after the House took historic action to pass the Tax Cuts and Jobs Act (H.R. 1) – bold tax reform legislation that will create more jobs, increase paychecks, and make the tax code simpler and fairer for Americans of all walks of life:
“This is a historic moment for the American people,” said Chairman Brady. “Today we give hope to middle-income families and Main Street job creators in Texas and across the country that a brighter future is on the horizon – a future where you can keep more of what you earn, start that new business, find that next job, and get that long-overdue raise. This vote is a big step forward – but it is not the last step. We will continue to strengthen this legislation and, working with the Senate, we will put tax reform on the President’s desk by the end of the year for the first time in 31 years.”
“Today we seized the opportunity of a lifetime to shed the status quo and transform our tax code to work for middle-income families and small businesses,” said Chairman Roskam. “There is more work to do but I’m pleased with our progress to bring tax relief to the hardworking families in my district and across the country. This new tax code is forward leaning and designed to make our economy boom again.”
The Tax Cuts and Jobs Act will deliver tax relief to families in every Congressional district across the country. With this bill, a typical middle-income family of four earning $59,000 (the median household income) will receive a $1,182 tax cut. The bill also is expected to create nearly 1 million new jobs, increase annual after-tax income for middle-income households by an average of $2,598, and grow our economy by more than 3.5 percent.
For individuals and families, the Tax Cuts and Jobs Act:
- Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35% so people can keep more of the money they earn throughout their lives, and continues to maintain 39.6% for high-income Americans.
- Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
- Eliminates special-interest tax breaks that increase rates and complicate Americans’ taxes – so an individual or family can file their taxes on a form as simple as a postcard.
- Takes action to support more American families by:
- Establishing a new Family Credit – which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses.
- Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
- Preserving the Adoption Tax Credit so parents continue to receive additional tax relief as they open their hearts and their homes to an adopted child.
- Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
- Streamlines higher education benefits to help families save for and better afford college tuition and other education expenses.
- Continues the deduction for charitable contributions for Americans who donate so people can continue to donate to their local church, charity, or community organization.
- Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000 – providing tax relief to current and aspiring homeowners.
- Continues to allow people to write off the cost of state and local property taxes up to $10,000.
- Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts so Americans can continue to save for their future.
- Repeals the Alternative Minimum Tax so millions of individuals and families will no longer have to worry about calculating their taxes twice each year and paying the higher amount.
- Provides immediate relief from the Death Tax by doubling the exemption and repealing the Death Tax after seven years. Family-owned farms and businesses will no longer have to worry about double or triple taxation from Washington when they pass down their life’s work to the next generation.
For job creators of all sizes, the Tax Cuts and Jobs Act:
- Lowers the corporate tax rate to 20% – down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.
- Reduces the tax rate on the hard-earned business income of Main Street job creators to no more than 25% – the lowest tax rate on small business income since World War II.
- Provides a new, low tax rate of 9% for the first $75,000 of business income earned by owners of pass-through businesses of all types who earn less than $150,000, which will help the Main Street startups in every line of business that fuel innovation and job creation in communities across the country.
- Establishes strong safeguards to distinguish between individual wage income and pass-through business income so Main Street tax relief goes to the local job creators it was designed to help most.
- Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing the growth of jobs, productivity, and paychecks.
- Protects the ability of small businesses to write off the interest on loans that help these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.
- Retains the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.
- Preserves the Research & Development Tax Credit – encouraging our businesses and workers to develop cutting-edge “Made in America” products and services.
- Strengthens accountability rules for tax-exempt organizations to ensure that churches, charities, foundations, and other organizations receiving tax-exempt status are focused on helping people and communities in need.
- Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation for many of our nation’s job creators.
- Makes it easier for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in our local communities.
- Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.
CLICK HERE to learn more about the Tax Cuts and Jobs Act.