Scott on Final Passage of Tax Reform: “Big Win for Middle Class Families, U.S. Economy”
Washington – This evening, after months of deliberation and discussion, the U.S. Senate successfully passed the historic tax reform package, Tax Cuts and Jobs Act, a yearlong process U.S. Senator Tim Scott (R-SC) has been intimately involved with since the working group first launched. The final bill will protect more of Americans’ money from being taxed, enhances significant credits like the Child Tax Credit, and maintains important features like the Earned Income Tax Credit, and deductions for mortgage interest and charitable contributions.
“From day one our priority has been simple: fix the broken tax code, and ensure the biggest winners from tax reform are our hardworking American families and our economy,” said Scott. “And that’s exactly what we delivered. Folks will be able to keep more of their hard-earned money, families will get a big break through the enhanced Child Tax Credit, and our corporate tax rate will finally be at a competitive level that will help us create the jobs of the future right here in the USA. We also repealed Obamacare’s Individual Mandate, an unfair tax that overwhelmingly burdens our middle class families. After years of a stalled economy and stagnant wages, tax reform will help generate the type of economic growth we have been lacking.”
The last time the U.S. tax code was overhauled was more than thirty years ago. Already, the new legislation is expected to bring economic relief to workers and families, and is also forecasted to strengthen the U.S. economy. A recent study of the Tax Cuts and Jobs Act has predicted that the bill is set to boost our national GDP by 1.7 percent, will create tens of thousands of new jobs, and increase wages by 1.5 percent. Additionally, a typical family of four making $73,000 is expected to see about a $2,000 tax cut or 60 percent reduction, while single parents making around $41,000 will see about a $1,400 tax cut or 75 percent reduction in their overall tax bill.
Around this time last year, Scott was asked by Senate Finance Chairman Sen. Orrin Hatch to be one of the key conduits of the tax reform overhaul process. Scott joined a small group of lawmakers including, Senators Rob Portman (R-OH), Pat Toomey (R-PA), and John Thune (R-SD), who took the lead in drawing in the support that was invaluable in securing the bill’s passage in the Senate. They were dubbed the ‘core four’ on tax reform by the Senate Majority Leader Mitch McConnell (R-KY). Earlier this month, Scott, alongside the other members of the ‘core four’ team, joined a group of eight Senate Republicans who sat on the Tax Reform Conference Committee and oversaw the further advancement of this historic legislation.
Throughout the process, Scott was able to advocate for key provisions that made it in the final version of the tax bill including the following:
- Expansion of the Child Tax Credit – Instead of receiving $1,000/child credit, families will be able to receive $2,000/child, a change specifically made to help average American families. Scott worked extensively with several of his colleagues, especially Sen. Marco Rubio (R-FL), on this provision and in the end was able to secure a larger break for families, by making $1,400 of the tax credit fully refundable for tax payers in the lower tax brackets. Read more about their work together here.
- Retained the 10% income bracket – Wanted to make sure our most economically disadvantaged Americans continue to get taxed at a low rate.
- Inclusion of the Investing in Opportunity Act – The IIOA will provide an opportunity for U.S. investors to use a temporary capital gains deferral in exchange for investing the capital in distressed communities across the country. This is an initiative that has the potential to positively impact up to 52 million Americans living in these communities.
- Simplification of the Tax Code – Nine out of 10 households will be able to do their taxes using the expanded standard deduction, which will save considerable time and resources in filing taxes.
- Prevented the “Rothification” of individual retirement accounts – By preserving the unique features of the IRA, tax payers will be able to continue to save for their future without having to worry about immediate taxation by the federal government.
- Maintained Mortgage Interest Deduction – Wanted to ensure homeowners are able to continue to benefit from a popular deduction used by thousands of Americans. He was behind key negotiations that helped to make the home mortgage interest deduction available up to $750,000.
- Relief to Our Small Businesses – Helped to advocate for tax relief for our small businesses, which are the backbone of our economy.
Now that the Tax Cuts and Jobs Act has passed the Senate, it is expected to be voted on again in the House tomorrow morning before it goes to the President for final approval and signature.