WASHINGTON, D.C. – Congressman Brian Fitzpatrick (PA-08), a Certified Public Accountant (CPA) and member of the House Small Business Committee, released the following statement Tuesday regarding the passage of historic tax reform legislation:
“A 21st century economy requires a 21st century tax code, making tax reform a crucial part of any pro-growth governing strategy. With today’s vote, our nation has taken a historic step to invest in American families and support American businesses and workers. More than just allowing Americans to keep more of their hard-earned money, this legislation maintains important parts of existing policy like deductions for student loan interest payments, strengthens and expands provisions like the Child Tax Credit, and takes new action to increase economic competitiveness at home and abroad. While this is an important piece of the puzzle, we cannot stop here. It is time Democrats and Republicans work together to take meaningful action on a wide range of priorities, from infrastructure to ending the culture of corruption in Washington.”
For individuals and families, the Tax Cuts and Jobs Act:
Lowers individual taxes and sets the rates at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37% so people can keep more of their hard-earned money.
Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,500 and $13,000 under current law to $12,000 and $24,000 for individuals and married couples, respectively
- Continues to allow people to write off the cost of state and local taxes – up to $10,000. Gives individuals and families the ability to deduct property taxes and income – or sales – taxes to best fit their unique circumstances
- Takes action to support more American families by:
- Expanding the Child Tax Credit from $1,000 to $2,000 for single filers and married couples to help parents with the cost of raising children. The tax credit is fully refundable up to $1,400 and begins to phase-out for families making over $400,000. Parents must provide a child’s valid Social Security Number in order to receive this credit
- Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
- Preserving the Adoption Tax Credit so parents can continue to receive additional tax relief as they open their hearts and homes to an adopted child.
- Preserves the mortgage interest deduction – providing tax relief to current and aspiring homeowners.
- For all homeowners with existing mortgages that were taken out to buy a home, there will be no change to the current mortgage interest deduction.
- For homeowners with new mortgages on a first or second home, the home mortgage interest deduction will be available up to $750,000.
- Provides relief for Americans with expensive medical bills by expanding the medical expense deduction for 2017 and 2018 for medical expenses exceeding 7.5 percent of adjusted gross income, and rising to 10 percent beginning in 2019.
- Continues and expands the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization
- Continues student loan interest deduction (**Fitzpatrick joined letter supporting continuation of deduction**)
- Continues Lifetime Learning Credit (**Fitzpatrick joined letter supporting continuation of deduction**)
- Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
- Provides support for graduate loans by continuing to exempt the value of reduced tuition from taxes. (**Fitzpatrick joined letter supporting continuation of exemption**)
- Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts (IRAs) so Americans can continue to save for their future.
- Increases the exemption amount from the Alternative Minimum Tax (AMT) to reduce the complexity and tax burden for millions of Americans.
- Provides immediate relief from the Death Tax by doubling the amount of the current exemption to reduce uncertainty and costs for many family-owned farms and businesses when they pass down their life’s work to the next generation.
For job creators of all sizes, the Tax Cuts and Jobs Act:
Lowers the corporate tax rate to 21% (beginning Jan. 1, 2018) – down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.
Delivers significant tax relief to Main Street job creators by:
- Offering a first-ever 20% tax deduction that applies to the first $315,000 of joint income earned by all businesses organized as S corporations, partnerships, LLCs, and sole proprietorships. For Main Street job creators with income above this level, the bill generally provides a deduction for up to 20% on business profits – reducing their effective marginal tax rate to no more than 29.6%.
- Establishing strong safeguards so that wage income does not receive the lower marginal effective tax rates on business income – helping to ensure that Main Street tax relief goes to the local job creators it was designed to help most.
- Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing growth of jobs, productivity, and paychecks.
- Protects the ability of small businesses to write off interest on loans, helping these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.
- Preserves important elements of the existing business tax system, including
- Retaining the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.
- Preserving the Research & Development Tax Credit that encourages our businesses and workers to develop cutting-edge “Made in America” products and services.
- Retaining the tax-preferred status of private-activity bonds that are used to finance valuable infrastructure projects.
- Eliminates the Corporate Alternative Minimum Tax, thereby lowering taxes and eliminating confusion and uncertainty so American job creators can focus on growing their business and hiring more workers, rather than on burdensome paperwork.
- Continues the successful Federal Historic Tax Credit (HTC) with slight modifications (**Fitzpatrick joined letter supporting continuation of this credit**)
- Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation for many of our nation’s job creators.
- Makes it easier for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in our local communities.
- Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad