Families Across America Can Expect a Tax Cut
By Adam Michel
The National Interest
December 6, 2017
Bold, pro-growth tax reform reached a major milestone last week. The House and Senate each passed slightly different versions of the Tax Cuts and Jobs Act. The two versions now head to a conference committee where select lawmakers from the House and Senate will work to hammer out one unified bill that can become law before the end of this year.
Policies in both bills would greatly improve our current, woefully out-of-date tax code. Independent analyses estimate that the economy could be almost 3 percent larger at the end of ten years, thanks to the pro-growth policies incorporated in the legislation. Even the notoriously conservative government scorekeepers predict that tax reform will boost the economy.
A bigger economy means more jobs and higher wages for working Americans. A 3 percent larger economy translates to more than $4,000 dollars per household, per year. American families could finally get a real raise.
If you’re a middle-class taxpayer, tax rates are lower, the standard deduction is doubled, and the child tax credit is increased—to $1,600 in the House version and $2,000 in the Senate’s.
If you’re a working taxpayer, in addition to a tax cut, your employer will be able to expand its operations and upgrade equipment. Other businesses will be doing the same. All this economic growth increases the need—and the competition among employers—for more workers. The result: higher wages, better benefits or both for you and other workers.
Both bills would cut the corporate tax rate to 20 percent—down from the current 35 percent rate, which is one of the highest corporate tax rates in the world. Family-owned and small businesses that pay their taxes as individuals will also see a new special tax cut.
Moreover, all businesses will also be able to immediately write off the costs of new equipment for five years or more.
Many tax subsidies are also on the chopping block. Rather than have your tax dollars prop up commercially unviable industries, this reform allows the marketplace—i.e., you, the consumer—to decide which products and services merit your support.
Both House and Senate tax plans are serious efforts to reform a complex and badly broken system. They provide significant relief to the vast majority of tax-paying Americans. More importantly, they free businesses to expand, invest and hire workers, generating better wages and benefits for American families across the nation.