Tax Reform 2.0 Gains Momentum
Less than a year ago, Congress passed and the President signed into law the Tax Cuts and Jobs Act to simplify our complicated tax code and lower rates for all Americans. Thanks to tax reform and other pro-growth policies, our economy is booming. You don’t just have to take my word for it – here are some numbers from the month of August:
- U.S. employers added more than 200,000 jobs as wages increased at the fastest year-on-year pace since June of 2009.
- Unemployment claims reached a 49-year low. The last time jobless claims fell to this point, it was December of 1969.
- Small business optimism hit a new record high.
- The number of individuals employed part-time who would prefer full-time work but could not find it has fallen to the lowest level since before the 2008-2009 recession.
- U.S. manufacturing grew at the fastest pace since May of 2004.
These numbers all serve as proof that the American people are better off now than they were just two years ago. I am eager to see this strong momentum continue, and I am glad to report that we aren’t slowing down our efforts to foster economic growth right here in the United States. Recently, the House Ways and Means Committee passed Tax Reform 2.0, a series of bills that would modify and build upon the Tax Cuts and Jobs Act.
The first bill in the series, H.R. 6760, the Protecting Family and Small Business Tax Cuts Act of 2018, would put in place several changes to the individual income tax rate. Since the Tax Cuts and Jobs Act provisions are set to expire at the end of 2025, perhaps the most important changes H.R. 6760 would implement are making the tax rate changes and the Child Tax Credit permanent. According to a Tax Foundation study, making these individual income tax changes from the Tax Cuts and Jobs Act permanent would increase long-term Gross Domestic Product (GDP) by 2.2 percent and create 1.5 million new full-time equivalent jobs.
The second bill in the series, H.R. 6757, the Family Savings Act of 2018, includes a number of important reforms to retirement accounts. For example, individuals would be able to contribute up to $2,500 into a savings account annually, and any withdrawals would be tax free.
The third bill in the series, H.R. 6756, the American Innovation Act of 2018, would allow businesses to deduct their start-up costs. Businesses could either deduct the lesser of their start-up expenses, or for firms with more than $120,000 in expenses, deduct a flat amount of $20,000.
Our tax reform overhaul provides much needed relief to American families, creates jobs here in the United States, grows our economy, and allows hardworking taxpayers to keep more of their own money in their pocket. We now have a unique opportunity to continue delivering on our promise to give the American people more of the results they deserve.
Committee passage of Tax Reform 2.0 is just the first step in the legislative process to make parts of our tax overhaul permanent. I will continue to listen to the people I represent in Alabama’s Second District and work alongside my colleagues in Congress to improve this package of legislation as we move towards advancing these pro-growth policies to the House floor for a vote.