Apr 23 2018
New Tax System Boosts Take-Home Pay, Promotes Job Growth
For all of the headaches that usually accompany Tax Day, this year brings some needed relief. This Tax Day was the last time Americans had to file their taxes under an outdated and woefully complicated tax code. Because of the “Tax Cuts and Jobs Act” enacted last year, Americans will now file their taxes under a code that lets them keep more of what they earn.
I strongly supported the Republican plan to cut taxes and reform the tax code because it prioritizes the success of American workers and middle class families. In fact, a less stressful Tax Day is just one of the advantages of the new system.
The goal of tax reform is to make every day of the year less stressful for Americans by cultivating the kind of confidence in our nation’s economy and workforce that leads to higher wages and better job opportunities. A pro-growth tax code sends this signal to our workers and our job creators, putting more money back into the hands of those who earned it.
Widespread Savings for Workers, Families
By now, most Americans should have started to notice the impact of the tax law in their paychecks. The new federal withholding guidelines based on the law’s lower tax rates took effect in February, and the Treasury Department has estimated 90 percent of U.S. workers will now bring home more of their wages rather than sending them to Uncle Sam.
These changes might seem small now, but they are expected to add up to significant savings for families, empowering them to plan for the future and offering relief when finances get tight. According to the Tax Foundation, an average family making the median income in Mississippi could keep hundreds of dollars more this year than they would under the old system.
Other provisions in the newly updated tax code, such as the doubling of the standard deduction for individuals and couples, could have a big impact on savings during next year’s tax season. The standard deduction helps simplify the filing process and save time, eliminating the need for many Americans to itemize deductions or spend money on tax preparation.
Out With the Old, In With the New
Not everything about the new tax code is different. The updated code expands and preserves popular items, including the child tax credit and incentives that support Americans’ savings for education and retirement. For example, the child tax credit is now $2,000 instead of $1,000.
One item that will not be missed is the requirement for every American to purchase health insurance. Republicans successfully repealed the unpopular individual mandate tax in President Obama’s health-care law – a penalty that has fallen heavily on hardworking Americans.
I am excited to see how these changes to the tax code help improve American lives and ignite our economy toward growth and prosperity. A groundswell has begun, with more than 500 companies using their tax savings to benefit employees. So far, more than four million Americans will receive bonuses. Now that this year’s Tax Day has come and gone, we have a great deal to look forward to thanks to a simpler new system and more take-home pay.