The House GOP’s Tax Cuts and Jobs Act is the first meaningful overhaul of the U.S. tax code in three decades.
Today, the average American spends 17 hours completing their taxes, and our economy loses $400 billion in annual productivity as a result. Even worse, coming out of the worst recession many of us have seen in our lives, our economy continues to limp along with anemic growth and stagnant wages.
But for economic growth in the 21st century, we need a tax code designed for the 21st century. The status quo is not good enough.
The Tax Cuts and Jobs Act is a bold, transformative approach to tax reform that simplifies the code and reduces the tax burden on working Americans and middle-income families. The bill cleared the House Nov. 16 by a vote of 227-205, and I was proud to play a part in passing this historic legislation.
H.R. 1 cuts federal income tax rates, eliminates loopholes and encourages investment in America’s economy. It replaces deductions and credits with broad tax reduction, eliminating a system that has played favorites and distorted economic decision making for decades.
Our plan is about Americans, especially low- and middle-income families, being able to keep more of their own, hard-earned money.
We’re lowering federal income tax rates across the board — consolidating the existing seven tax brackets into four — while nearly doubling the standard deduction for individuals and married couples.
According to Census data, the average family of four in the 6th Congressional District makes $132,066 per year. Under this bill, using the increased standard deduction, that family will take home an additional $4,658 per year.
The bill also increases the Child Tax Credit from $1,000 to $1,600 per child and raises the credit’s annual income threshold from $110,000 to $230,000.
Over 40,000 people in the 6th District already claim this credit, and even more will be able to under the Tax Cuts and Jobs Act. And the fact that this is a credit — rather than a deduction — means the money goes in your pocket whether you itemize or not.
At the same time, the Tax Cuts and Jobs Act eliminates the Alternative Minimum Tax. The AMT currently impacts 26,877 filers in the 6th — almost twice the national average.
Finally, our bill encourages economic growth and job creation by lowering small businesses’ taxes to their lowest rates since World War II.
Unfortunately, those who cling to the status quo are already hard at work employing the same old scare tactics and false innuendos. Don’t fall for it.
The Washington Post’s recent fact check gave Senate Democrats “four Pinocchios” for saying our plan raises taxes on Americans — its strongest possible rating. The Post wrote that anyone spreading the claim “should delete their tweets and make clear they were in error.”
In the coming weeks, there will be conversations about changes to make our proposal better. One such change has already been made, restoring the adoption tax credit for families opening their homes to children from around the world.
Again, some will focus on the fact that our plan eliminates most deductions in the current tax code. But, by broadly cutting rates and doubling the standard deduction, we ensure that the overwhelming majority of 6th District residents see their taxes cut — with or without individual credits and deductions. In fact, the nonpartisan Joint Committee on Taxation recently confirmed that the Tax Cuts and Jobs Act would cut taxes for Americans at every income level.
Over the years, Washington has created special-interest loophole after special-interest loophole, creating a system that benefits those whose lawyers and accountants can best navigate and exploit the tax code. The Tax Cuts and Jobs Act will remove those loopholes, adding fairness to the system and making the tax code so simple that nine out of 10 Americans will be able to file their return on a form the size of a postcard.
The plan isn’t perfect. Few things are. Still, the Tax Cuts and Jobs Act is a critical step forward for families, small businesses, and for our hopes of modernizing America’s economy for the 21st century. As the House and Senate continue working on a compromise bill that can be signed into law by the President, I will remain focused on simplifying the tax code and lowering taxes on a vast majority of Americans. Our economy depends on it.
Karen Handel represents Georgia’s 6th Congressional District in the U.S. House of Representatives. The district includes parts of Brookhaven, Dunwoody and Sandy Springs. She serves on the House Judiciary Committee and the House Committee on Education and the Workforce.