A Christmas Gift
December 25, 2017
As promised, Congress and the Trump Administration delivered substantial tax reform to tens of millions of American taxpayers and hundreds of thousands of US corporations and businesses before Christmas. For years, many of my colleagues and I have called for tax reform - reform that would benefit American workers by letting them keep more of what they earn, bring American companies back to our shores, promote economic growth, and lower taxes on businesses. The Tax Cuts and Jobs Act, which has now become law, is the answer to delivering economic expansion, higher wages, more job opportunities and individual prosperity.
Under the new tax system, the standard deduction that most Americans use is doubled. Single filers will see their standard deduction go from $6,500 to $12,000, married couples filing jointly will see theirs go from $12,000 to $24,000 and heads of household will go from $9,550 to 18,000. Furthermore, the additional child tax credit is increased to $2000 and becomes fully refundable up to $1400. And to the benefit of all individual filers, the top rate for each bracket is lowered. For Oklahomans, that means the average 4-person household in the Fourth District making $73,624 will see a tax cut of $2077.
This legislation was also a major tax relief for job creators of all sizes – from the small businesses on Main Street to large corporations that employ thousands – and the results are already beginning to emerge. With a significantly lowered corporate tax rate of 21%, American companies will now be more competitive on the global stage. Since the final passage of the tax reform bills, numerous corporations like AT&T, Fifth Third Bank, Comcast, Bank of America, Boeing, Wells Fargo and more have pledged to give hundreds of thousands of their employees generous bonuses, and some have announced plans to invest billions of dollars into the American economy. For those of us who have been advocating this kind of tax reform, the results we are already seeing confirms what we have been claiming for years - lowering taxes unleashes the innovation of American businesses and helps families all across the income spectrum.
In addition to the benefits on the individual and corporate level, the tax bill was changed to support other initiatives like housing and education. I am pleased that the medical expense deduction was retained and the mortgage interest deduction will be allowed on home purchases up to $750,000. Furthermore, I am pleased that the Conference Committee removed harmful language that would have forced thousands of graduate students to face significant yet unintended tax bills on tuition waivers.
No tax reform bill is perfect and there are aspects of the code that can still be improved. But the passage of this tax reform bill is historic. This was a major legislative accomplishment and a welcome Christmas gift for millions of Americans.