Jaime will support U.S. House tax cut plan that will allow hardworking residents to keep more of their money, add to their paychecks
WASHINGTON, D.C. – Today, U.S. Representative Jaime Herrera Beutler announced her support for the U.S. House’s Tax Cuts and Jobs Act that will allow residents across Southwest Washington to keep more of their money and earn bigger paychecks.
For instance, a family of four in Southwest Washington making a median salary of $83,874 will get to keep $1,929 more of their money instead of paying it in taxes; andindependent studies show 19,968 more jobs will be created in the state of Washington and middle-income families will see on average $2,672 more in their paychecks due to economic growth.
“This bill is a good deal for Southwest Washington taxpayers,” said Jaime. “While portions of our economy have seen a boost since the recession, the take-home pay, salary increases and raises of actual workers have not – and Congress has an opportunity to change that by passing this tax cut bill. These tax cuts will nearly double the amount the IRS can’t touch from your paycheck each year, from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married folks. Seven out of ten Southwest Washington taxpayers already use this ‘standard deduction’ to calculate their tax bill – and with it doubling, even more people here will use it to pay a lower, simpler tax bill, which will leave more money in their wallets.
“For individuals who rely on relief from their mortgage interest payments, property tax payments or costs of raising kids, those deductions and credits are largely preserved and even strengthened. For instance, a new ‘family credit’ provides a $300 boost for each parent to help with everyday expenses. If you’re a family of four in Vancouver and you earn around $84,000 – the mean family salary in our region – you will keep about $1,929 more of your money each year.
“Nearly eight out of 10 Americans live paycheck to paycheck, unable to save any money once the bills are paid and groceries are bought. By voting yes for this bill, Congress has the opportunity to spark economic growth that will provide an average $2,600 boost in annual paychecks.
“The bottom line is this: as a result of this tax cut plan, most residents will keep more of their money, paychecks will be bigger, and we’ll have nearly 20,000 new jobs in Washington alone.”
How Southwest Washington will benefit from the U.S. House’s tax cuts:
- More money in the pockets of Southwest Washington residents:
- The median household of four in Southwest Washington (making $83,874) will save $1,929 per year on their taxes
- Lowers individual tax rates
- Increases the standard deduction
- Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts
- More jobs & wage increases:
- 19,968 more jobs in Washington state
- $2,672 is the estimated gain of take-home pay for middle-income families
- Supports small businesses:
- Provides a new, low tax rate of 9% for startup businesses who fuel innovation & job creation
- Allows businesses to immediately write off the full cost of new equipment
- Supports families:
- Establishes a new Family Credit – which includes a larger Child Tax Credit (an increase from $1,000 to $1,600), and the Child & Dependent Care Tax Credit to help all families with their everyday expenses
- Continues to allow people to write off the cost of state and local property taxes up to $10,000
- Preserves the home mortgage interest deduction up to $500,000
- 90% of Southwest Washington residents will be able to file their taxes on a postcard-sized form
Charge vs. Fact in the Tax Cuts and Jobs Act:
Charge 1: “This bill is a tax increase on the middle class.”
FACT: This false attack was being spread before the Tax Cuts and Jobs Act was even released. In its “Four Pinocchio” rebuke (out of four possible Pinocchio’s – rated a “Whopper”) of the claim that most middle class families would have their taxes increased, the Washington Post fact-checker wrote:
“In their haste to condemn the GOP tax plan, Democrats have spread far and wide the false claim that families making less than $86,100 on average will face a hefty tax hike. Actually, it’s the opposite. Most families in that income range would get a tax cut.”
Charge 2: “This bill is a giveaway to the most wealthy.”
FACT: In fact, this bill maintains the top 39.6% tax rate on high-income earners, while lowering the tax rate on low- and middle-income taxpayers. It eliminates dozens of costly and complex loopholes and special deals that have historically benefitted wealthier Americans the most. The wealthiest Americans will continue to pay the most in taxes, both in dollar and percentage terms.
Anyone who makes this charge has likely not studied the bill. For instance, they’ve certainly missed that under the Tax Cuts and Jobs Act, if a pro sports team owner wants a new stadium, they’ll be forced to pay for more of it themselves. This tax reform bill eliminates a special tax break that exists under the code that incentivizes taxpayer-funding of new stadiums.
Charge 3: “This bill will only benefit big corporations.”
FACT: If you think corporations should continue getting tax breaks for renting out suites at the Super Bowl or holding executive golf outings, then the current tax code is for you. The Tax Cuts and Jobs Act eliminates the deduction of these and other corporate loopholes.
Rather than using this narrowly-tailored, complex system of special tax loopholes to hold more rounds of golf, corporations will see relief from what is currently the highest corporate tax rate in the world. Multiple economists conclude that a more competitive corporate tax rate will result in more jobs and bigger paychecks right here in the U.S.
Charge 4: “This is simply a giveaway to big corporations at the expense of Main Street businesses.”
FACT: Main Street businesses stand to gain substantially from Tax Cuts and Jobs Act in Southwest Washington. Of the nearly 40,000 Southwest Washington small businesses that operate as “pass through” entities (taxes are paid by the owner on her individual returns):
- Those small businesses that make $150,000 or less in net business income, the first $75,000 in income will be lowered to 9%.
- The small business tax rate will be lowered to 25%.
Other pieces of the bill that will benefit small businesses:
- Small businesses will be able to write off the full cost of new equipment.
- Small businesses will be able to write off the interest on loans used to start or grow operations – and hire more workers.
- The “Death Tax” will be phased out after six years, eliminating the penalty for passing family-owned farms and small businesses to the next generation.
Charge 5: “Changing the state and local tax deduction will raise taxes significantly on middle-class families.”
FACT: The Tax Cuts and Jobs Act is focused on simplifying the tax code by lowering overall rates and increasing the standard deduction. It continues to allow families to deduct state and local property taxes up to $10,000.
When critics of the plan cherry-pick individual deductions that offer a specific benefit under the current tax code, they are ignoring the bigger reforms that will ultimately save lower- and middle-class Washingtonians more money overall. Seven out of 10 Southwest Washington residents don’t use this deduction – or any itemized deduction. By nearly doubling the standard deduction, even fewer would find that the local tax deduction benefits them as much as taking advantage of the standard deduction and saving more money than they do now.
Charge 6: “This is fiscally irresponsible and will add trillions to our deficit.”
FACT: First of all, the bill eliminates billions of dollars in special interest loopholes and tax breaks that have only benefited a narrow segment of wealthy individuals, or that have stifled economic growth. By eliminating these breaks, by incentivizing small and large employers to invest more in their operations, and by lowering the overall tax burden on these employers, private sector businesses will grow and increase revenue, paychecks will grow, and more people will be employed – contributing the necessary revenue to fund these tax cuts.
This method of calculating what a bill will cost and how it’s paid for – accounting for a larger, more robust economy — is referred to as “dynamic scoring,” which the non-partisan Joint Committee on Taxation has utilized since 2003.
Furthermore, when those critics of the tax cut plan are the same individuals who had no fiscal reservations about voting in Congress for trillions of dollars of unfunded stimulus plans, bailouts, Medicaid expansions, and failed green energy subsidies – it begs the question of whether their attacks along these lines are based on policy, or politics.
Charge 7: “Charitable giving will plummet as result of this bill.”
FACT: The Tax Cuts and Jobs Act preserves the itemized deduction for charitable giving, so that Washington residents can continue to see tax benefits from donating to local churches and nonprofits. Additionally, by growing Americans’ paychecks, the bill will give Americans more money to donate to churches and charities.
Charge 8: “Charities that benefit under the current tax code will be harmed.”
FACT: Under this tax cut bill, tax exempt status for charitable organizations is protected. What the bill includes are commonsense reforms that ensure such privileged status is being reserved for organizations that truly serve and help people. For instance, under this reform, a not-for-profit public art gallery will receive a bigger tax benefit than a private art collector.
Charge 9: “Republicans are simply helping corporations be able to ship more jobs overseas.”
FACT: U.S. based corporations will see immediate incentive for expanding their operations within the U.S. when their overall tax rate is lowered from 35% to 20%, which nonpartisan analyses predict will raise the average American’s paycheck by $1,800 to $4,000.
Additionally, the Tax Cuts and Jobs Act will allow for a one time “repatriation” of overseas earnings, meaning that money will be brought to the U.S. from foreign accounts and assets where it can be invested in U.S. operations and businesses – a potential $2.6 trillion stimulus to the U.S. economy.