New tax code will work for everyone
Posted on November 28, 2017 14:53 pm CST
By Congressman Billy Long,
A lot has changed since 1986, but our tax code isn’t one of them. Ronald Reagan was president and "Top Gun," along with its theme song, “Take My Breath Away,” just hit the big screen. Springfield’s own Tommy Whitlock penned that famous theme song. Times were good. Yet, 31 years later, hardworking Americans are living in an era characterized by stagnant wages and businesses moving overseas at the expense of the middle class. It’s a reality House Republicans understand all too well and one we are working to alleviate. With the passage of H.R. 1, the Tax Cuts and Jobs Act, our bill simplifies an archaic tax code by expanding standard deductions, consolidating tax brackets and closing special-interest loopholes.
Under the House Republicans’ pro-growth tax plan, the number of tax brackets would be decreased by nearly half. In the current code, there are seven tax brackets. Our plan lowers that number to just four: zero, 12, 25 and 35 percent, while still maintaining the 39.6 percent. For example, a person making $48,000 could drop from a 25 percent top marginal tax rate to 12 percent under the proposed changes. In dollars, that’s an increase of almost $6,000 to their individual standard deduction — a change that means more take-home money and less government overreach. After all, people know what to do with their money better than the government does.
But individuals aren’t the only ones that win based on the House bill. Not only does this bill create a new Family Credit, which expands the Child Tax Credit, but it keeps the Child and Dependent Tax Credit — reductions that make a difference for working families. The new Family Credit would increase the Child Tax Credit from $1,000 to $1,600. For a family barely getting by, that’s a big difference.
This code works for everyone, from Missouri’s working families to its small business owners. As a former small businessman, I know firsthand the challenges small businesses face when it comes to our complex tax code. Missouri is home to over 500,000 small businesses employing 1.1 million workers. But in order to succeed, we need to create an environment that encourages innovation instead of forcing it overseas to a more favorable tax code. According to the Tax Foundation, the Tax Cuts and Jobs Act would create 975,000 news jobs — 18,000 in Missouri alone. It’s a recipe for success.
Everyone deserves a tax code they can understand. Our current tax code is not only outdated but unnecessarily complex. Americans spend almost 9 billion cumulative hours a year filing their taxes and $100 billion annually to comply with the individual income tax. There is a reason nine out of 10 Americans have to use some type of software to file their taxes. Under the Tax Cuts and Jobs Act, 90 percent of Americans would need just a postcard (not a Ph.D.) to file their taxes.
The passage of the Tax Cuts and Jobs Acts gets us one step closer to giving hardworking Americans an overdue break. Now it’s up to the Senate to work with the House and pass a tax reform bill worth the president’s signature.