Without question, the single most important reason for tax reform is to lower tax rates for the average American so that more of their paycheck remains in their pocket. Under the Tax Cuts and Jobs Act, the vast majority of Northern California residents will save money, period. Here’s how:
The standard deduction will be doubled from $6,350 to $12,000 for individuals; meaning the first $12,000 of your income is tax-free. For married couples, that number doubles from $12,700 currently to $24,000 under our bill.
In the North State, more than 70 percent of residents claim the standard deduction, rather than itemizing. That is a fact.
These people will immediately save a significant amount of money. For many that hadn’t used it previously, utilizing the standard deduction will now make the most sense, not to mention save the most money.
If you’re using the standard deduction, you now don’t have to itemize. That means no more paying professionals to help navigate through the murky waters of our antiquated tax code. The way things stand; the act of doing your taxes is outrageously complicated. Not anymore. Many will be able to do their taxes on a form the size of a post card. No more complicated documents and no more paid professionals.
For families that face the everyday expenses that come with raising children, the Child Tax Credit is expanded from $1,000 to $1,600. That extra $600 – a 60 percent increase – will go a long way for families, or a single parent that faces their own unique set of challenges.
We all know that, for many families, children aren’t the only dependents. Sometimes a family member gets sick or otherwise needs additional support. These things are out of our control. That’s why we’ve expanded the $300 Child Care Tax Credit to also cover each non-child dependent. Families come in all shapes and sizes, and this legislation seeks to expand that universe.
Also of great importance, this legislation will help get many more Americans back to work. According to a recent study by the Tax Foundation, the Tax Cuts and Jobs Act will create nearly 1 million new jobs across the nation, with 111,108 of those jobs located in California. The same study also estimates the median household income in California will increase by $2,932. On top of that, a family whose household earns $59,000 per year will receive a $1,182 tax cut. That is the definition of a tax cut for Middle America.
For years now, middle-income Americans have been struggling under our slow-growing economy – we’re fixing that as well. Lowering our corporate tax rate and cutting taxes for small businesses will create an environment where more employers can afford to hire more workers – and pay them more, too.
There are also aspects to this that you might not expect. No matter where you come from or what you do, we all have to shop; it’s part of life. If you’re like me, you’d much prefer to purchase goods for your family with a “Made in America” label, but it’s often either not affordable or not available at all. With the corporate tax rate lowered from 35 percent to 20 percent, companies can afford to relocate back home and make their products right here in the USA. This will incentivize new entrepreneurs to start up and grow their companies locally in communities large and small, all across America
The house has taken the first steps by passing this legislation, now it’s the senate’s turn.