This afternoon, the House of Representatives took historic action, passing tax reform for the first time since 1986. The Tax Cuts and Jobs Act simplifies our tax code so that individuals and families can now file their taxes on a form as simple as a postcard. The legislation is predicted to save middle-class families in Texas's Second Congressional District almost $2,600 in taxes per year and creating over 81,100 Texas jobs.
Lower Taxes to Give Relief to Americans and their Families
Under the Tax Cuts and Jobs Act, a middle-income family of four earning $59,000 (the median household income), will receive a $1,182 tax cut. The bill also:
- Lowers individual tax brackets for low and middle-income Americas to 0%, 12%, 25%, and 35%, allowing you to keep more of your money. The bill also maintains the 39.6% for high-income Americans.
- Nearly doubles the standard deduction: $12,200 for single filers and $24,400 for married couples.
- Preserves the Earned Income Tax Credit, providing relief to the lowest income Americans.
- Preserves the Mortgage Interest Deduction for already existing mortgages and maintains the home mortgage interest deduction for newly purchased primary residence homes up to $500,000 (previously at $1 Million).
- Fully Repeals the Estate Tax by 2025 and doubles the exemption immediately.
- Establishes a new family credit and expands the Child Tax Credit by $600 to help parents with the cost of raising children. It also provides a credit of $300 for each parent and non-child dependent, helping families with their everyday expenses.
- Allows individuals to write off the cost of state and local property taxes up to $10,000.
It's important to note that the new system incentivizes Americans to take the standard deduction, but most current deductions will still remain in law if you choose to itemize your tax return instead.
Lower Taxes for Job Creators to Help Hire and Grow Our Economy
There are over 68,700 taxpayers in the Second Congressional District of Texas who rely on small business income.
The Tax Cuts and Jobs Act:
- Implements a new 9% tax rate on the first $75,000 of net business income, lowering taxes for small business owners
- Lowers the corporate tax rate is 20% -down from 35% - helping to make our country more competitive and to keep jobs here in America.
- Reduces small business tax rate to no more than 25%, the lowest tax rate on small business income since WWII.
The House bill helps simplify our complex tax code and make it fairer for Americans, families, and job creators. The Senate is also considering their own version of tax reform, which also includes a repeal of the individual mandate. The legislation will be debated between the two chambers, where the differences will be discussed and hammered out. Each chamber will then vote once again on the final bill. This is a long process, and I want to hear from you. Please be sure to email me with your thoughts and suggestions.
GOD and TEXAS,
Member of Congress