Policies in both tax bills would greatly improve America’s current, woefully out-of-date tax code.
Bold, pro-growth tax reform reached a major milestone last week. The House and Senate each passed slightly different versions of the Tax Cuts and Jobs Act. The two versions now head to a conference committee where select lawmakers from the House and Senate will work to hammer out one unified bill that can become law before the end of this year. They are working on a tight timeline, with only about two weeks left in the congressional schedule.
Policies in both bills would greatly improve our current, woefully out-of-date tax code. Independent analyses estimate that the economy could be almost 3 percent larger at the end of ten years, thanks to the pro-growth policies incorporated in the legislation. Even the notoriously conservative government scorekeepers predict that tax reform will boost the economy.
A bigger economy means more jobs and higher wages for working Americans. A 3 percent larger economy translates to more than $ 4,000 dollars per household, per year. American families could finally get a real raise.
So what, specifically, is there to like in these bills?
If you’re a middle-class taxpayer, tax rates are lower, the standard deduction is doubled, and the child tax credit is increased—to $ 1,600 in the House version and $ 2,000 in the Senate’s.
Under the current tax code, a married couple with combined earnings of $ 75,000, three dependent children and a home mortgage, pay $ 1,753 each year in federal income taxes. Heritage Research Fellow Rachel Greszler calculated that, under the “House’s tax plan, their tax bill would decline by $ 1,033 or 59 percent (to $ 720). Under the Senate’s plan, their bill would be reduced by $ 2,014 or 115 percent (to $ 0 plus a refundable credit of $ 261).”
Families across America can expect a tax cut.
If you’re a working taxpayer, in addition to a tax cut, your employer will be able to expand its operations and upgrade equipment. Other businesses will be doing the same. All this economic growth increases the need—and the competition among employers—for more workers. The result: higher wages, better benefits or both for you and other workers.