Last week, Congress passed the first overhaul of our tax code in a generation. I was proud to support its passage in the House and am confident it will make a real difference for families and businesses in Kansas.
The Tax Cuts and Jobs Act will grow the economy, restore lost jobs, and increase paychecks for workers by reducing tax rates. While opponents of this bill have claimed it will only benefit the wealthy, the facts prove the opposite.
The bill will mean a family of four earning $73,000 will get to keep $2,059 more of their paychecks next year. That’s real money. In fact, that’s nearly twice the median mortgage payment for American homeowners.
The new law delivers these benefits by enacting key reforms for individuals and families. The Tax Cuts and Jobs Act lowers rates across the board and nearly doubles the standard deduction for individuals and married couples from $6,500 and $13,000 to $12,000 and $24,000. The new law also expands the child tax credit from $1,000 to $2,000 to help parents with the cost of raising children.
In addition, the Tax Cuts and Jobs Act will help families through increased economic growth. The federal tax code was uncompetitive and harmful to American manufacturing, which hurt hardworking families. At 35 percent, the U.S. has one of the highest corporate tax rates in the industrialized world. Mexico’s rate is 20 percent, the United Kingdom’s is 19 percent and Canada’s is 15 percent. This isn’t smart for business, which is why lowering our high rate to be in line with the rest of the world was a commonsense and long overdue policy change. Top Democrats, including Sen. Chuck Schumer called for this last year.
The Tax Cuts and Jobs Act lowers the corporate tax rate to a reasonable 21 percent beginning next year. This means real tax relief to job creators and will allow local manufacturers such as Cessna and Spirit AeroSystems to compete on a level playing field with international rivals. This new corporate tax rate will also encourage companies overseas to bring jobs to Kansas. The effects of these changes will be significant.
It’s also important to consider that the benefits of tax reform aren’t just material. Higher wages, bigger paychecks and a simplified tax-filing process will give Americans more discretionary time. More money in your pocket means spending more time doing the things – and being with the people – you love. People struggling to make ends meet while caring for families understand that being taxed less means you have to work fewer hours to earn the same income.
Finally, this new law is a win for fairness. What you earn is not the property of the Internal Revenue Service. It’s your money, not the government’s. You know how to spend your money better than Washington. You shouldn’t be forced to go without a family vacation or get second job because Washington has a spending problem.
The Tax Cuts and Jobs Act becoming law is a historic moment that will help reverse three decades of increasing complexity in our code. Last year, Republicans made a promise to the American people that we’d deliver tax relief. We’ve done just that.
Ron Estes represents Kansas’ 4th District in the U.S. House of Representatives.