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Congressman Tom Cole

Representing the 4th District of Oklahoma

Taxes

America is a global leader in business and innovation, yet for many years, our tax code was outdated. Prior to 2017, the last major update of our tax code was in 1986. The tax system – a compilation of $1.6 trillion in annual deductions, credits, exclusions, exemptions and special rates – was enormously complex and created confusion, distortions in economic incentives and hindered America’s economic competitiveness to the detriment of Americans’ opportunities. For this reason, I have long believed comprehensive tax reform is necessary and essential for future economic growth.

Tax Cuts and Jobs Act

I was proud to join my colleagues in passing the Tax Cuts and Jobs Act in 2017. This comprehensive tax reform legislation modernized our tax system and still carries benefits for individuals, businesses and the American economy.

Regarding individuals, the Tax Cuts and Jobs Act:

  • Lowered individual income tax rates across the board
  • Doubled the standard deduction, which is claimed by nearly 90 percent of taxpayers
  • Doubled the child tax credit, saving families over $570 billion
  • Expanded 529 education savings accounts to K-12 educational expenses
  • Zeroed out the ACA’s individual mandate penalty, which disproportionately impacted low- and middle-income Americans
  • Preserved the student loan interest and medical expense deductions

Regarding businesses, the Tax Cuts and Jobs Act:

  • Lowered the corporate tax rate to 21 percent, bringing the U.S. rate in line with the average rate among industrialized nations
  • Permitted small and family businesses to deduct 20 percent of their income for tax purposes, saving small businesses over $400 billion for growth and investment

In total, the non-partisan Tax Foundation estimated GDP growth will increase by 1.7 percent due to this legislation, resulting in 339,000 new full-time jobs and a 1.5 percent boost in wages. In a separate analysis, the Tax Policy Center determined all income groups will see reduced taxes on average, receiving an average tax cut of $2,100 and a boost in after-tax income of more than 2 percent.

In the days ahead, I will continue working to ensure tax dollars are spent wisely and that congressional decisions regarding taxes allow Americans to keep more of their hard-earned money. I will also work to ensure the Internal Revenue Service (IRS), which oversees the collection of taxes and administration of the tax code, operates efficiently and is responsive to filers. In 2019, I was proud to support the Taxpayer First Act, which overhauled the structure and accountability systems of the IRS, as well as its taxpayer assistance programs.

More on Taxes

September 26, 2016 Weekly Columns
Americans have become all too familiar with the recent confusing and shady practices of the Internal Revenue Service, and no one looks forward to seeing an envelope from them in their mailbox. It is one of the most unpopular government agencies because it is also one of the most powerful in its ability to literally ruin people’s lives.
 
July 25, 2016 Weekly Columns
One of the greatest aspirations we have in this nation is the concept of the “American Dream”. The idea that any person, regardless of race, ethnicity, gender or religion can achieve prosperity, happiness and success has always been a bedrock principle of our national experience. Achieving the American Dream generally relies upon individual initiative, so the best way the government can assist in the pursuit is to get out of the way.
 
June 13, 2016 Weekly Columns
As intentionally spelled out in the U.S. Constitution in the first and arguably most foundational amendment, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press.”

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