For the first time in years, a typical middle-income family will see significant tax relief.
November 17, 2017
Dear Friends,
Last month, I wrote to you about the House Republican plan to reform our broken tax code. I also promised you that I would keep you informed as tax reform works its way through Congress.
As you may have seen, yesterday the House passed historic legislation to deliver meaningful tax relief to families, workers, and businesses. The goal of this legislation is to simplify the tax code, allow Americans to keep more of their hard earned money and encourage companies to stay in the U.S. to keep vital American jobs. It represents the most sweeping tax overhaul in a generation.
The House Republican bill doubles the standard deduction to protect more of Americans’ paychecks from taxes. It increases the Child Tax Credit to help more families with the cost of raising children. And it preserves important tax benefits to help families afford a home, pay their property taxes, and put their kids through college.
By doubling the standard deduction for individuals and families, and lowering the overall tax rate, the Tax Cuts and Jobs Act will result in more money in the pockets of average Texans, more than making up for the elimination of any one particular deduction. Tax simplification also means that most Americans will now be able to file their taxes on a postcard. While the House has passed our version of the bill, the Senate’s legislation has some differences, and the final version is not yet complete.
Importantly, the bill we just passed out of the House means that for the first time in years, a typical middle-income family will see significant tax relief. In fact, the Tax Foundation estimates our plan would increase the median Texan household income by $2,558.
I have heard from some constituents who are concerned that the tax bill’s reforms remove some deductions from the tax code. An example of this is that the media is alleging that our tax bill is bad for teachers because they would no longer be able to deduct $250 from their taxes for classroom expenses. It’s important to remember that the value of this deduction is, on average, only $37.50. Under our tax plan, however, that same teacher would be able to save more than $1,000. The benefit under the House Republican plan to a teacher or average worker is clear – and anything you might hear to the contrary is just fake news.
The tax reform bill also ensures that most small businesses will pay a top rate of no more than 25 percent on their pass-through income. That’s a huge difference from today, where they’re paying rates as high as 40 percent.
Finally, this tax relief plan means that America will have one of the most modern and competitive tax codes in the world. Rather than a corporate income tax rate of 35 percent, we’ll have a corporate rate of 20 percent – which beats many of our major international competitors. Instead of encouraging American companies to keep trillions of dollars in profits overseas, we’ll have a pro-growth tax system that encourages them to bring this money home. That means more jobs and more investment in Texas.
This is the most significant step we’ve taken toward comprehensive tax reform in more than 30 years, and I am proud to support it.
Sincerely,
Kay Granger
Member of Congress