Dear Mr. Bailey:
Thank you for contacting me regarding H.R. 1, the Tax Cuts and Jobs Act. Understanding your ideas and concerns helps me better represent you and the Second District of Minnesota. I value your comments and appreciate the opportunity to respond.
As you may know, on November 2, 2017, Congressman Kevin Brady, Chairman of the House Committee on Ways and Means, introduced H.R. 1. This bill works to fulfill the promise I, and many others, made to our constituents to provide tax relief and simplification. It provides lower and simplified taxes, and makes filing so easy that it could be done on a post card. The current tax system is too costly, too complex, and unfair to hardworking Americans. Our tax code punishes work, rewards special interests, and discourages job creation and investments here in the U.S. Our country has been plagued by subpar economic growth of only 1-2% over the last eight years and American families' wages have stagnated.
This bill simplifies the tax code, reducing the number of brackets from seven to four, moving the lowest tax bracket to zero percent. Taxpayers in every bracket will see a reduction in their taxes, increasing the amount of money in all Americans' pockets, and growing the economy. It also repeals the Alternative Minimum Tax, preventing families from having to calculate their taxes twice and pay the higher amount. We also repeal the Death Tax, in which Washington takes Minnesotans' money twice for the same assets. The Death Tax will be repealed after six years, and until then, the Death Tax exemption will be doubled, freeing up more resources for our hard-working families, small-business owners, and farmers.
This tax bill works to lower taxes for individuals, families, and small businesses. It doubles the standard deduction, which is taken by seventy percent of Americans, from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples. If a filer chooses instead to itemize their deductions, this bill allows for deductions for mortgage interest for any existing mortgages, and for mortgages on newly purchased homes up to $500,000; for state and local property taxes up to $10,000; and charitable contributions.
The Tax Cuts and Jobs Act also provides additional deductions, even if a filer chooses not to itemize, in the form of a new Family Credit, which includes an expanded Child Tax Credit. This new credit provides for $1,600 per child, and $300 for each parent and non-child dependent in a family. It also includes an Earned Income Tax Credit, for low- and middle- income individuals and couples, and the Higher Education Tax Credit, which retains the American opportunity tax credit (AOTC). The AOTC is a credit for qualified education expenses for an eligible student for the first four years of higher education, up to $2,500 credit per eligible student. This bill also retains the Adoption Tax Credit, which is a non-refundable tax credit for up to $13,460. Under this bill, a typical middle-income family of four, earning the median household income in the United States, will receive a tax cut of $1,182.
This bill doesn't only help families and individuals, but it also works to help our small businesses and job creators. American job creators have been leaving for other countries due to America's business tax rates, which are some of the highest in the world. The Tax Cuts and Jobs Act lowers the corporate tax rate to twenty percent, down from thirty-five percent. It also lowers the pass-through rate to twenty-five percent, which is the lowest tax rate on small business income since World War II. This legislation also allows businesses to write off the full cost of new equipment immediately, as well as allowing small businesses to write off the interest on loans.
Reforming our tax code is key to getting our economy going again. Tax reform will make America more globally competitive by encouraging private sector investments, which will lead to economic growth, and it will let all Americans keep more money in their pockets. Families in Minnesota need a tax code that works for them. That is why I ran for Congress, and that is what this bill accomplishes. I have been passionate about this issue since my days of organizing tax reform rallies at the Minnesota State Capitol, and I am proud to support this legislation.
H.R. 1 passed the House of Representatives, with my support, on November 16, 2017, and the Senate passed an amended version of H.R. 1 on December 2, 2017. To reconcile the two versions of the bill, the House voted to go to conference on December 4, 2017, and the Senate voted to go to conference on December 6, 2017. I will continue to monitor the progress of the conference committee, and will keep your thoughts in mind when I review the conference committee's work.
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