A Big Day for Tax Reform
Congressman John Shimkus (R, Illinois-15) praised the introduction of H.R. 1, the Tax Cuts and Jobs Act, which will bring much needed reforms to the tax code for the first time in more than 30 years.
“Today is a big day,” Shimkus said. “My friend, Chairman Kevin Brady (R, Texas-8), and his Ways and Means Committee have put together a simpler, fairer, flatter tax code that will put more money in my constituents’ pockets and support a growing, thriving economy for all Americans.”
The Tax Cuts and Jobs Act maintains the 39.6 percent top rate for high-income Americans, but lowers rates and simplifies tax brackets for low- and middle-income families. By nearly doubling the standard deduction, from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples, the bill will shield twice as much of an individual or family’s annual earnings from federal taxes.
“Almost 80 percent of my district takes the standard deduction,” Shimkus said. “Under this new plan, that number will only go up. This means that my constituents will keep more of their hard-earned paychecks, and will be able to easily file their taxes themselves, instead of having to hire a tax professional.”
In addition, for thousands of Illinois farmers and small businesses, the Tax Cuts and Jobs Act provides relief from the “Death Tax” by immediately doubling the current exemption, and ultimately repealing this misguided penalty within six years. The bill allows businesses to immediately write off the full cost of new equipment, and protects the ability of small businesses to write off the interest on loans.
Lastly, corporate taxes under the bill would fall from 35 percent (the highest rate in the industrialized world) to 20 percent, and special-interest loopholes and incentives that reward companies for sending jobs overseas are eliminated.
The Ways and Means Committee has scheduled a markup of the bill for November 6, 2017.
More information and the full text of the bill can be found at fairandsimple.gop.
Real World Examples from the Office of the Speaker:
Family of Four Making $59,000 Per Year
Steve and Melinda have two children in middle school and are living secure middle-class life—but budgets are tight. With tax reform, they’ll get some much-needed breathing room financially.
As a result of lower tax rates, a significantly larger standard deduction, and an enhanced Child Tax Credit and Family Flexibility Credit, Steve and Melinda will see their total tax bill drop from $1,582 to only $400. That’s a tax cut of $1,182 they can use for whatever is important to them, whether it’s paying bills, purchasing a new refrigerator, or putting away savings for the future.
Single Mother Making $30,000 Per Year
Cindy has a fulfilling job and a promising career path as an assistant manager at a local restaurant. She works hard to support herself and her 11-year-old daughter, but most days Cindy feels like she’s barely getting by much less getting ahead. With the Tax Cuts and Jobs Act, relief is in sight.
Come Tax Day, Cindy will receive a tax refund of more than $1,000 as a result of the bill’s lower tax rates, larger Child Tax Credit, and Family Flexibility Credit. This is more than $700 larger than the refund she receives today, offering a more meaningful reward for her hard work as she raises her daughter and pursues her own professional aspirations.
Firefighter Making $48,000 Per Year
Alan is a young firefighter in the community he has called home his entire life. He enjoys the job and has chosen it as his profession just like his father and grandfather did before him. The Tax Cuts and Jobs Act will allow him to see even greater reward for his hard and selfless work.
Under this legislation, Alan will pay a top marginal tax rate of just 12% instead of the 25% top rate he pays today. Additionally, he’ll see nearly double the amount of his paycheck protected from taxes because the bill significantly increases the individual standard deduction from $6,350 today to $12,000. In the end, Alan will see his total tax bill go down from $5,173 currently to just $3,872—a total tax cut of $1,301.