Washington, D.C. – Today, with the support of Congressman David Rouzer, the House of Representatives passed arguably the biggest tax cut and reform of the tax code in history. The Tax Cuts and Jobs Act (H.R. 1) is a bold, pro-growth tax bill aimed at improving the standard of living for all Americans, strengthening our economy, and bringing jobs back.
“This legislation respects hardworking taxpayers and the challenges they face by making the tax code clearer, simpler, and fairer. This bill will bring about a healthier economy creating more jobs, increasing wages, and leaving more money in your paycheck. Under the provisions of this legislation, for the average family of four, the first $55,000 earned would be tax free,” said Congressman David Rouzer.
The Tax Cuts and Jobs Act:
- Lowers the current individual tax rates from 10% to zero, 15% to 12%, and then retains the 25%, 35% and 39.6% brackets, and adjusts the range of income subject to these brackets enabling Americans to keep more of the money they earn.
- Eliminates special-interest deductions.
- Doubles the standard deduction so that everyone – regardless of income level – will benefit. For example, the first $12,000 an individual earns would be tax free – up from $6,000 under current law. Joint filers will receive a standard deduction of $24,000 versus $12,000 under current law. And, most notably, the first $55,000 earned for the average family of four would be tax free.
- Expands the Child Tax Credit from $1,000 to $1,600 to help parents with the increased costs of raising children and, in addition, establishes a new Family Credit of $300 for filers and non-child dependents.
- Under current law, many small businesses are required to pay taxes on net business income at the highest marginal tax rate of 39.6%. This bill provides relief to small businesses by reducing the rate to no more than 25% — the lowest on small business income since World War II.
- Implements a new, lower 9% tax rate on the first $75,000 of net business income for active small business owners earning less than $150,000 through their businesses.
- Allows businesses to immediately write off the full cost of new equipment in each year through 2022 to improve operations and unleash job and paycheck growth.
- Repeals the Death Tax after six years and immediately doubles the exemption.
- Eliminates the personal and business Alternative Minimum Tax (AMT).
- Eliminates the unintended incentives in the current tax code that have resulted in jobs moving overseas.
- Encourages jobs to be brought back from other countries, greater productivity and higher wages by lowering the corporate tax rate from 35%, which is the highest in the industrialized world, to 20%.