NATION: Tax Reform, A Christmas Gift to the American People
My story is no secret. I grew up in a single-parent household in North Charleston. My mom worked 16-hour days as a nurse’s aide to provide for my brother and me. At times, we had to use the oven to heat the house. There were also times when we couldn’t afford Christmas presents.
So, for me, tax reform has always been about helping struggling families and rewarding hardworking Americans by helping them keep more of their paychecks. The truth is, what we accomplished has nothing to do with labels. It has nothing to do with whether you’re a Democrat or Republican. Under the Tax Cuts and Jobs Act, we simply focused on delivering much-needed tax relief to hardworking Americans who want a brighter future for their families.
Here’s what we did:
Every single tax bracket will see a tax cut.
A single-parent household, like the one I grew up in, making $41,000 a year will see a 73 percent tax cut. A typical family of four earning about $73,000 will see a cut of nearly 58 percent. With this bill, we are doubling the standard deduction and the Child Tax Credit. We are also preserving the child and dependent care credit, as well as the Adoption Tax Credit. These are all important wins for hardworking families across South Carolina.
The new tax reform law also eliminates Obamacare’s individual mandate – the part of the law that forces you to either buy insurance or pay a penalty if you choose not to purchase a plan. Approximately 80 percent of the folks who are punished by the individual mandate live in a household making $50,000 or less. A third of those folks live in a household making $25,000 or less. Repealing this tax is great news for hardworking Americans. All that is eliminated is the tax penalty -- this bill does not take health care away from anyone, and in fact we also expanded the medical expense deduction to better help those facing high medical costs.
The Tax Cuts and Jobs Act also includes my bipartisan Investing in Opportunity Act, which will provide an opportunity for U.S. investors to use a temporary gains deferral in exchange for investing the capital into distressed communities. There are currently 52 million Americans living in such communities across the country, and trillions of dollars in unused capital gains sitting on the sidelines. This public-private partnership will create new channels for investment that will grow jobs, inspire entrepreneurship, and improve the local economy for future generations.
Our bill also lowers the corporate tax rate to 21 percent, down from 35 percent, which will help create hundreds of thousands of jobs across the nation. Recently, more than 7000 CEOs said business tax reform would lead to more jobs, higher wages and better benefits. We are ensuring the jobs of the future are created right here in America. We’re providing relief for the backbone of our economy, small business owners, by expanding and creating even more jobs in their own communities. The Tax Cuts and Jobs Act will allow small businesses to immediately write off the full cost of new equipment and offers a 20 percent tax deduction to the first $315,000 of joint income.
The proof is in the pudding. In 2018, the Tax Cuts and Jobs Act will help everyday Americans see more of their hard-earned money in their paychecks, while also significantly boosting our economy. This week marks a historic moment, and one we should all be celebrating.
Passing this tax bill is monumental for the American people. This is a once-in-a-generation opportunity for us to say to the people that we represent, we hear you, and we see you. For the first time 30 years, we have sent a major tax reform package to the President’s desk for his signature — a tax reform package that will give the American people the relief they need and certainly deserve.
(Tim Scott, a Republican representing South Carolina in the U.S. Senate, is a member on the Senate Finance Committee and the House-Senate Tax Reform Conference Committee.)