Congress has finally delivered on its promise to cut taxes for the middle class by lowering rates while preserving the credits and deductions that matter most for hard working tax payers. I am proud to have voted for the Tax Cuts and Jobs Act to lower tax rates for all earners. It is time to bring America’s tax code into the 21st century to make it work again for American families and small businesses.
Under the new tax code, everyone will see more money in their paycheck immediately and by doubling the standard deduction, the first $12,000 in earnings for singles and $24,000 for married couples will be tax free. Regardless of your filing status, every single person will see a lowering of their marginal tax rate – meaning your monthly take-home pay will rise, regardless of your income bracket. To save families even more money, the bill doubles the Child Tax Credit from $1,000 to $2,000 and increases eligibility, saving you even more money on the back end. According to data from the Internal Revenue Service, this means a $1,255 increase in value from what families were previously able to claim.
Also important to many who called my office to share their views were the Earned Income Tax Credit and the Adoption Tax Credit, deduction for charitable contributions and retirement savings options, which are all preserved in this bill. It also maintains the mortgage interest deduction for current homeowners and for 99 percent of future homes in the 10th district, which is why the National Association of Home Builders supports the final bill.
The Tax Cuts and Jobs Act also works for individuals and students, preserving the deduction for undergraduate tuition and exemptions for graduate student tuition waivers. Of the almost 20,000 students who deduct their tuition interest, that $1,000 value will be retained in total. Students will be able to pursue the next level of education, attending colleges, universities and technical schools to position for the job of their dreams.
The United States now ranks 12th worldwide in new business openings. For the first time in 35 years, American business closures outnumber business openings. That means jobs are vanishing faster than they are being created. This is one of the biggest reasons why we need to reform our tax code. Starting Feb. 1, small businesses will be able to make new hires and investments thanks to the new 20 percent deduction for qualified pass-through income and the ability to immediately write off the full cost of purchases for new and used equipment.
Moreover, the vast majority of small businesses in the valley are structured as pass-through corporations, which will make our businesses more competitive allowing them to stay in the valley and provide new job opportunities and higher wages for our workers. My goal is to bring the American Dream within reach for our entrepreneurs trying to make a better life for themselves and their children.
Jobs have always been one of the biggest issues for us in the valley. With agriculture as our largest economic output, it is important we make changes to keep our farmers competitive on a global level. My good friend Bill Lyons recently expressed his concerns the final bill would not include important measures to keep farms, and the almond industry in particular, on track for continued success. I am happy to report to him and other farmers that the final bill maintained these provisions and even allows for greater expansion of agricultural exports to help our farms be more globally competitive and hire more of our neighbors to keep growing our job market. It also takes agricultural cooperatives into consideration, insuring they can maintain their tax status to remain competitive with bigger conglomerates.
Contrary to some of the misinformation out there, this bill is a tax cut for taxpayers across the board, and especially the middle class. This bill will put more money in the pockets of individuals and families, and help entrepreneurs and small business owners to grow their businesses and create more jobs for communities desperately in need of new economic growth. Stagnant less than two percent economic growth over the past decade is not good enough. In the months leading up to this moment, the economy has hit all-time highs as are your 401(k) savings accounts in anticipation of these tax cuts. When implemented, the economy will continue to grow at 3 or 4 percent. I am proud to have been a part of passing the first comprehensive tax reform since Reagan was president and to contribute to bringing our tax code into the 21st century.
Jeff Denham represents the 10th California Congressional district.