FAIRLESS HILLS, PA – Congressman Brian Fitzpatrick (PA-08) joined more than two dozen lower Bucks County businesses Thursday for a roundtable discussion on the benefit of the new tax reform law and its impact on our local economy. The event was hosted by the Lower Bucks Chamber of Commerce and Pennsylvania Chamber of Business and Industry and included a cross-section of local businesses.
“Small businesses drive our local economy but for too long, top-down, one-size-fits all policies from Washington held back their growth. Passing common sense tax reform was a crucial step toward empowering entrepreneurs and increasing paychecks here in our region. Discussions like today’s roundtable push aside partisan noise and focus on the heart of our local economy,” said Fitzpatrick. “As I’ve heard time and again across Bucks and Montgomery counties: small business owners and workers want policies that help them keep more of what they earn to invest in themselves, their operations and their communities. Whether it’s the typical middle-class family of four who will see a $3,500 tax cut, or a local businesses preparing to grow, after today, it’s clear the new tax law is delivering for Lower Bucks County.”
Fitzpatrick, a Certified Public Accountant (CPA) and member of the House Small Business Committee, has consistently stated that tax reform is a crucial part of any pro-growth governing strategy and has focused his efforts to support small businesses and increase take-home pay for hardworking Americans. Since being signed into law, more than four million workers have received bonuses or raises, and U.S. companies have announced billions of dollars of new investments into operations and workforce training. The National Federation of Small Business released a survey earlier this month that noted small business optimism at its highest level in 45 years.
More than just supporting American businesses, these tax cuts mean the typical middle-class family of four in PA-08 will see a more than $3,500 savings. Additionally, the legislation maintains and expands important middle-class measures like deductions for student loan interest payments, mortgage interest deduction, the Child Tax Credit, and more. (A complete list is below)
BY THE NUMBERS – PA-08:
- A four-person family with two children and a district median household income of $121,904 will see a tax cut of $3,566
- A single filer with no children and a district median household income of $80,199 will see a tax cut of $2,098
- Increase of the Child Tax Credit for 45,809 taxpayers who claim it.
- Small business tax relief to 51,533 taxpayers who own or operate small businesses
WHAT THEY’RE SAYING:
- Bill Pelosi, Lower Bucks Chamber of Commerce: “With so many important issues for Lower Bucks businesses being debated and decided in Washington – including tax reform - it’s great to have the ability to sit down with our representative and keep the lines of communication open. We appreciate Congressman Fitzpatrick’s accessibility and informative discussion on the new tax law and its impact on our community.”
- Jennifer Reis, Pennsylvania Chamber of Business and Industry: “The economic benefits of federal tax reform are already being realized with hundreds of businesses announcing their intent to reinvest in their facilities and workers due to anticipated savings from the new law. We were proud to have stood with our colleagues at the U.S. Chamber and with chambers of commerce nationwide to help get this legislation to the finish line, and we look forward to the long-term positive impacts that these reforms will have on our nation’s overall competitiveness. We’re working to get similar reforms enacted at the state level, to help foster a brighter economic future for the Commonwealth.”
- Maggie Sheely, U.S. Chamber of Commerce: “The benefits of tax reform continue to roll in for businesses, and their employees and families. Almost immediately after passage of the Tax Cuts and Jobs Act late last year, companies across America and right here in PA announced additional investments. From Philadelphia-based Comcast’s massive, planned broadband infrastructure improvements, to Pittsburgh’s PNC Bank hiking salaries and upping retirement contributions, to employee bonuses announced by AccuWeather, based in State College, and American Bank of Allentown, workers and communities across PA are already feeling tax reform’s positive effects. In addition, with lower rates locked in and new withholding tables finalized, nearly 90% of Americans across the country are now directly seeing higher paychecks, keeping more of their hard-earned money each month. Thankfully, Congressman Brain Fitzpatrick, a CPA by training, recognized the savings and investments his constituents would accrue, and could be counted on throughout the process to help achieve tax reform for hard working Pennsylvanians.”
ABOUT THE TAX LAW:
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
- Supports 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.
- Improves savings vehicles for education by allowing families to use 529 accounts to save for elementary, secondary and higher education.
- 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 was 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