Our current tax system is broken and we in Congress finally have the opportunity to help American families. I have been all across the First District of Virginia hearing stories from families, farmers, and small business owners about how our tax code is too confusing and extremely expensive. Last week, the Ways and Means Committee introduced a tax relief bill called the Tax Cuts and Jobs Act.
The Tax Cuts and Jobs Act is Congressâ€™ answer to the American people. It will deliver much-needed tax relief to families, help our workers and job creators compete and win here at home and around the world, and make the tax code simpler and fairer for all Americans. It will fuel economic growth â€“ leading to more jobs, fairer taxes, and bigger paychecks for generations to come. This week, The Tax Cuts and Jobs Act passed out of the Ways and Means Committee by a vote of 24-16, and the next step will be consideration on the House floor.
Like with any legislation, constituents have many questions about this tax relief will affect them. I hope to clear these up below. Still have questions?
Tax Relief: A Charge and Response
Charge: â€śThis is just a tax cut for the wealthiest Americans.â€ť
Response: No. The Tax Cuts and Jobs Act delivers tax relief at every income level â€“ while maintaining the top 39.6% tax rate on high-income earners. It lowers tax rates on low- and middle-income Americans and significantly increases the standard deduction, which means hardworking Americans can immediately take home more of their paychecks.
Charge: â€śThis bill is a direct attack on the middle-class.â€ť
Response: Actually, the Tax Cuts and Jobs Act is a direct and immediate boost for middle-income Americans who have been struggling to get by, let alone get ahead, under todayâ€™s broken tax code. It reduces the tax rates for low- and middle-income Americans, and roughly doubles the standard deduction â€“ protecting up to $24,000 of your familyâ€™s take-home pay each year from taxes. It delivers much needed support to American families who today are struggling to keep up with the rising costs of child care, higher education, and looking after their loved ones.
With this legislation, middle-income families will get to keep more of the money they earn for what matters to them rather than sending it to the Internal Revenue Service. In Virginia, this bill is estimated to create
Charge: â€śBy eliminating the personal exemption, this legislation increases taxes on families.â€ť
Response: The Tax Cuts and Jobs Act takes several bold steps to deliver relief for families. First, this legislation helps families keep more of their paychecks by roughly doubling the size of the standard deduction and lowering tax rates. This bill also establishes a new Family Credit â€“ which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses. Finally, it preserves the Child & Dependent Care Tax Credit so families donâ€™t have to choose between earning a paycheck and taking care of their children and older dependents such as a disabled grandparent who may need additional support.
Charge: â€śThis bill changes the mortgage interest deduction â€“ making it harder for Americans to buy a home and invest in their local communities.â€ť
Response: Thatâ€™s not so. After receiving feedback from families across the country, we made sure to maintain the mortgage interest deduction in the Tax Cuts and Jobs Act. This legislation also allows Americans to deduct state and local property taxes. Combined with policies to create jobs, grow paychecks, and strengthen our economy â€“ by far the biggest driver of a strong housing market â€“ maintaining this tax benefit will help more Americans, especially middle-class Americans, achieve the dream of homeownership.
Charge: â€śEliminating the Medical Expense Deduction and the Property Casualty Loss Deduction will be a financial burden for millions of Americans.â€ť
Response: The Tax Cuts and Jobs Act is focused on helping Americans throughout their lives. This bill lowers the tax rates and increases the standard deduction so people can immediately keep more of their paychecks â€“ instead of having to rely on a myriad of provisions that many will never use and others may use only once in their lifetime. This tax relief will give families the flexibility to use their paychecks for what matters most to them every year.
Charge: â€śTax reform is just about putting more money in the pockets of big business.â€ť
Response: Not at all. Tax reform is about helping hardworking Americans and Main Street job creators get ahead â€“ instead of being left behind or just getting by under todayâ€™s broken tax code. The Tax Cuts and Jobs Act will help our nationâ€™s local job creators start and grow a business, hire workers, increase paychecks, and invest in our local communities.