This is a historic moment for the American people. For the first time in 31 years the House and the Senate have now come together to deliver pro-growth tax reform that will help more Americans across our country keep more of their hard-earned money. This legislation will also grow our economy make our companies of all sizes more competitive and help prevent more American jobs from continuing to go overseas. I appreciate my colleagues hard work and look forward to voting on this bill in the House next week.Senate Finance Committee Chairman Orrin Hatch (R-UT) said:
Historic achievements are challenging and reforming the tax code is no different. From the outset Republicans in Congress sought to develop a comprehensive pro-growth tax reform bill that will grow the economy jumpstart job creation and increase take-home pay for hardworking American families. Over the last several months weve kept a steady pace allowing each chamber to work its will and produce legislation that will achieve our shared goal. And over the last two weeks conferees in the Senate and House have met examined the merits of each bill worked to reconcile the differences and found consensus to produce final bicameral legislation. Today marks a critical milestone in this endeavor and keeps us on track to deliver a comprehensive tax overhaul to the American people by years end.
- CLICK HERE to read the full legislative text of the Tax Cuts and Jobs Act.
- CLICK HERE or the image below to read the policy highlights in the Tax Cuts and Jobs Act.
- CLICK HERE to read the Joint Committee on Taxation revenue table.
TAX CUTS & JOBS ACT HOUSE AND SENTE CONFERENCE COMMITTEE
POLICY HIGHLIGHTS The Tax Cuts and Jobs Act (H.R. 1) overhauls Americas tax code to deliver historic tax relief for workers families and job creators and revitalize our nations economy. By lowering taxes across the board eliminating costly special-interest tax breaks and modernizing our international tax system the Tax Cuts and Jobs Act will help create more jobs increase paychecks and make the tax code simpler and fairer for Americans of all walks of life. With this bill the typical family of four earning the median family income of $73000 will receive a tax cut of $2059. 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 $6500 and $13000 under current law to $12000 and $24000 for individuals and married couples respectively.
- Continues to allow people to write off the cost of state and local taxes up to $10000. 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 $1000 to $2000 for single filers and married couples to help parents with the cost of raising children. The tax credit is fully refundable up to $1400 and begins to phase-out for families making over $400000. Parents must provide a childs 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 $750000.
- 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.
- Eliminates Obamacares individual mandate penalty tax providing families with much-needed relief and flexibility to buy the health care thats right for them if they choose.
- 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 students by continuing to exempt the value of reduced tuition from taxes.
- 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 lifes work to the next generation.
- 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 nations history.
- Delivers significant tax relief to Main Street job creators by:
- Offering a first-ever 20 tax deduction that applies to the first $315000 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.
- Establishes an environmentally responsible oil and gas program in the non-wilderness 1002 Area of the Arctic National Wildlife Refuge (ANWR). Congress specifically set aside the 1.57-million acre 1002 Area for potential future development. Two lease sales will be held over the next decade and surface development will be limited to 2000 federal acres just one ten-thousandth of all of ANWR.
- Significantly boosts American energy production. Responsible development in the 1002 Area will raise tens of billions of dollars for deficit reduction in the decades to come while creating thousands of new jobs reducing our dependence on foreign oil and helping to keep energy affordable for American families and businesses.
- Provides a temporary increase in offshore revenue sharing for the Gulf Coast in 2020 and 2021 allowing those states to invest in priorities such as coastal restoration and hurricane protection.
