Senator Orrin Hatch (R-Utah), the Chairman of the Senate Finance Committee, introduced the Tax Cuts and Jobs Act, his proposal for comprehensive tax reform based on the unified framework put together by Hatch, the Senate Finance Committee, the House Ways and Means Committee, and the Trump administration.
The legislation will update the US tax code, and provide tax relief for middle-class families and small businesses in Utah and around the country. Estimates show this bill could save a typical US family of four up to $1,500 annually (more details to come throughout the afternoon).
The Tax Cuts and Jobs Act will bring our outdated tax code into the 21st century and provide much-needed tax relief for hardworking American families and small businesses. Our tax reform package will unleash the American economy, leading to more jobs, higher wages, and greater investment here at home. Passing tax reform is more important now than ever. The cost of doing nothing would be too much for the American people to bare.
Now, after nearly a decade of stagnant wages and sluggish economic growth, we finally have a President who is serious about working to ensure that we have a tax code that actually works for the American people.
The Tax Cuts and Job Act:
- Lowers individual tax rates for low- and middle-income Americans by affectively expanding the zero tax bracket and maintaining a 10 percent bracket, allowing hardworking taxpayers to keep more of the hard-earned money, make ends meet, and save for retirement. The bill includes a reformed rate structure that targets tax relief to the middle class while maintaining the existing tax distribution, and a 38.5 percent bracket for high-income earners.
- Nearly doubles the standard deduction to reduce or eliminate the federal income tax burden for tens of millions of American families. The standard deduction will increase from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. For single parents, the standard deduction will increase from $9,300 to $18,000.
- Recognizes the unique challenges faced by parents with young children by:
- Expanding the child tax credit from $1,000 to $1,650 and allowing many more parents to claim the credit by substantially lifting caps;
- Preserving the child and dependent care tax credit to help working parents care for their children and older dependents—such as an aging grandparent—who need support;
- Preserving the adoption tax credit to help families with the high costs of adopting children; and
- Allowing parents to more effectively save for the education costs of unborn children.
- Preserves the deduction for charitable contributions, continuing a long recognition of the importance of private philanthropy for the churches and community organizations that daily provide aid and assistance to those in need.
- Protects the home mortgage interest deduction for existing mortgages and maintains the deduction for newly purchased homes up to $1 million. This incentive for homeownership provides tax relief to current and aspiring homeowners.
- Continues popular retirement savings programs, such as 401(k)s and Individual Retirement Accounts, to help Americans build their retirement nest eggs and prepare for the future.