House Passes Tax Overhaul Plan
The biggest change to the tax code in more than 30 years cleared its first hurdle in the House Thursday, but the debate is just beginning.
The measure passed Thursday 227-205, with every Democrat voting no.
Here’s a breakdown of the potential changes.
For individuals, it slashes the number of tax brackets from seven to four 12, 25, 35 and about 40 percent.
It doubles the standard deduction, while increasing the child tax credit by $600.
It would mean about $1,000 in tax cuts for an average Michigan family of four when filing their 2018 returns.
For businesses, it would take the top corporate tax rate from 35 to 20 percent, and move the U.S. to a system that taxes only the domestic income of companies based here instead of global income.
Meanwhile, the Senate is coming up with a different tax plan that must be reconciled with this plan before heading to the president, where there are already signs of trouble.
“I’m not for the current version. What I want to see is the information to prove the kind of economic growth we’re going to get with all of our tax provisions,” said Senator Ron Johnson, a Republican from Wisconsin.
Senator Johnson would be one of the only two votes Republicans can afford to lose when the Senate votes, which could be a challenge after the joint committee on taxation projected that, starting in 2021, Americans making $30,000 or less annually would actually see their taxes go up under the Senate’s plan.
Same story for Americans earning $75,000 or less starting in 2027.
The Senate could vote after Thanksgiving.
Congressman Bill Huizenga of Michigan’s 2nd District released a statement Thursday after voting in favor of this tax reform legislation: “Our plan lowers tax rates, doubles the standard deduction, increases the Child Tax Credit, preserves the Adoption Tax Credit, and creates a new Family Tax Credit that will provide real tax relief for hardworking middle class families across West Michigan. Additionally, our legislation will increase economic growth by cutting taxes on small businesses so they can invest more of their money into growing their local business and create new jobs in our community. Lastly, our legislation also lowers the corporate tax rate so Michigan job creators of all sizes can compete against foreign companies, expand in Michigan, and create good-paying jobs.
Our nation’s tax code hasn’t been overhauled in three decades. In that time, economic growth has failed to reach its potential while special interests and the well-connected have created loopholes for themselves at the expense of low and moderate income families. The Tax Cuts and Jobs Act reverses this trend by simplifying our tax code, eliminating loopholes, and delivering tax relief for hardworking middle class families and small businesses.
This legislation provides more opportunity for West Michigan families living paycheck to paycheck to achieve the American Dream.”