House Passes Historic Bicameral Tax Reform Agreement, Sends to President
WASHINGTON, DC – Today, The U.S. House of Representatives, along with the Senate, passed the Conference Report to accompany H.R. 1, the “Tax Cuts and Jobs Act,” which will now be sent to the President’s desk for his signature. The achievement is the first major tax reform measure since Ronald Reagan’s Presidency. It provides across the board tax rate reductions and takes steps to simplify the tax code while positioning U.S. businesses and job creators to be significantly more competitive globally. Seventh District Representative Rob Woodall supported the measure and issued the following statement after passage.
“Today’s historic agreement to reform America’s tax code for the first time in more than three decades marks tremendous progress and is the fulfillment of a commitment made to the American people,” said Rep. Woodall. “As a long-time advocate for the FairTax, which I believe is the truest form of fundamental tax reform, I’m pleased to see many of its principles of simplicity, transparency, and competitiveness incorporated into H.R. 1. The ‘Tax Cuts and Jobs Act’ reduces individual rates, empowers our businesses and job-creators to be more competitive at home and abroad, and sets the invaluable precedent that consensus on big ideas is not only attainable, but also replicable, and I look forward to building on this consensus as we take on new legislative challenges next year.”
Key measures of the reform enacted through H.R. 1 include, but are not limited to, the following:
For individuals and families, the Tax Cuts and Jobs Act:
• Retains seven brackets, but at reduced rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%).
• Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,500 and $13,000 under current law to $12,000 and $24,000 for individuals and married couples, respectively.
• Increases the child tax credit to $2,000. Of this, $1,400 would be refundable, with the refundable portion indexed to inflation. All dependents ineligible for the child tax credit are eligible for a new $500 per-person family tax credit. Provisions begin to phase out at $400,000 ($200,000 for single filers).
• Retains other above-the-line deductions, including educator expenses and student loan interest. Graduate student tuition waivers also remain in place.
• Retains the charitable contribution deduction. Also retains the mortgage interest deduction for acquisition, but limited for new purchases to $750,000 in mortgage debt, while eliminating the deduction for equity debt.
• For all homeowners with existing mortgages that were taken out to buy a home, there will be no change to the current mortgage interest deduction.
• Continues to allow people to write off the cost of state and local taxes – up to $10,000. Gives individuals and families the ability to deduct property taxes and income – or sales – taxes to best fit their unique circumstances.
• Eliminates Obamacare’s individual mandate penalty tax – providing families with much-needed relief and flexibility to buy the health care that’s right for them if they choose.
• Maintains the Earned Income Tax Credit to provide important tax relief for low-income working Americans.
• Increases the exemption amount from the Alternative Minimum Tax (AMT) to reduce the complexity and tax burden for millions of Americans.
• Provides immediate relief from the Death Tax by doubling the amount of the current exemption to reduce uncertainty and costs for many family-owned farms and businesses when they pass down their life’s work to the next generation.
For job creators of all sizes, the Tax Cuts and Jobs Act:
• Lowers the corporate tax rate to 21% – down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.
• Adopts a 20 percent deduction for pass-through income, limited to the greater of (a) 50 percent of wage income or (b) 25 percent of wage income plus 2.5 percent of the cost of tangible depreciable property for qualifying businesses, including publicly traded partnerships but not including certain service providers.
• Enacts deemed repatriation of currently deferred foreign profits at a rate of 15.5 percent for liquid assets and 8 percent for illiquid assets.
• Allows full (100%) expensing of short-lived capital investment, such as machinery and equipment.
• Eliminates the Corporate Alternative Minimum Tax, thereby lowering taxes and eliminating confusion and uncertainty for American job creators.
To learn more about the bill in its entirety, click here.
Congressman Woodall represents the Seventh Congressional District of Georgia, which includes the majority of Forsyth and Gwinnett counties, and currently serves as Chairman of the Rules Subcommittee on Legislative and Budget Process, as well as serving on the Transportation & Infrastructure Committee, and Budget Committee.