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Today, U.S. Representative Jaime Herrera Beutler supported the final tax cut bill expected to be signed into law this week that will allow Southwest Washington residents to keep more of their money and earn bigger paychecks.

The Tax Cuts and Jobs Act approved by the U.S. House today represents a compromise between the U.S. House- and Senate-passed tax cut bills. The U.S. Senate is expected to pass the bill this evening and send it to the President’s desk.

“Once this tax cut bill is signed into law, the average Southwest Washington family of four will keep $2,385 more of what they earn,” said Jaime. 

“The bill we passed today improves on the earlier version I voted for in several measurable ways for folks in all phases of life – from those preparing to begin their careers, to those in retirement. It protects virtually every middle-class homeowner by raising the mortgage interest deduction to $750,000, it expands vital relief for those families with high medical expenses, it doubles the child tax credit, and reinstates protection for all state and local taxes up to $10,000. I’m pleased that graduate students preparing to enter the workforce will have reduced tuition exempted from taxes – another improvement from our earlier bill. For those planning for retirement, popular savings accounts such as IRA’s and 401(k)s are preserved, and relief from the death tax that inhibits passing small family businesses and farms to the next generation is doubled. For the 75 percent of Southwest Washington taxpayers who use standard deduction, they will now see nearly double the amount of their money protected from taxes, and even more taxpayers will now be able to take advantage of the standard deduction.

“Importantly, this bill will boost the economy in a manner that will provide tangible benefits to hardworking folks from Bucoda to Vancouver, from bigger paychecks to more job opportunities. We read about the ‘recovery’ from the great recession that may be benefitting Wall Street, but hasn’t boosted workers’ take-home pay or helped enough of the families continuing to live paycheck to paycheck. The critics of this tax cut plan seem to concede that our present ‘recovery’ is good enough, but I don’t accept that. Today I am taking action to jumpstart the real economic recovery that will help residents of Southwest Washington earn more money and live a more economically secure life.”

Wins for Southwest Washington:

• MORE MONEY IN YOUR POCKET: Significantly increases the standard deduction so more of what you earn – $12,000 for individuals and $24,000 for married couples – is tax free.

• SAVINGS: An average family of four in Southwest Washington making the median salary of $83,874 (according to IRS data), will save $2,385 (according to calculations by Ways & Means Committee)

• PRESERVES STATE AND LOCAL TAXES: Allows people to continue to write off the cost of state and local taxes up to $10,000
  
  
• DOUBLES CHILD TAX CREDIT to $2,000 from $1,000

• PRESERVES THE HOME MORTGAGE INTEREST DEDUCTION: Providing tax relief to current and aspiring homeowners. For all homeowners with existing mortgages that were taken out to buy a home, there will be no change to the current mortgage interest deduction; for homeowners with new mortgages on a first or second home, the home mortgage interest deduction will be available up to $750,000.

• EXPANDS THE MEDICAL EXPENSE DEDUCTION: Provides relief for Southwest Washingtonians with expensive medical bills by expanding the medical expense deduction for 2017 and 2018 for medical expenses exceeding 7.5% of adjusted gross income, and rising to 10% beginning in 2019.

• LOWERS INDIVIDUAL TAX RATES FOR LOW- AND MIDDLE-INCOME AMERICANS:
• Lowers individual taxes and sets the rates at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37% so people can keep more of the money they earn throughout their lives

• PRESERVES THE CHILD AND DEPENDENT CARE TAX CREDIT: Helping families care for their children and older dependents

• PRESERVES ADOPTION TAX CREDIT

• ELIMINATES AFFORDABLE CARE ACT PENALTY: In June, Klickitat County residents were nearly double-slammed by the Affordable Care Act (ACA) when there were no health insurers offering plans in that county –a continued trend of dwindling health care options in rural areas – and as a result, residents would have been forced to pay the $695 “individual mandate” penalty for not purchasing health care. The Tax Cuts and Jobs Act eliminates the ACA’s individual mandate penalty.

• LOWERS CORPORATE TAX CREDIT to 21% down from 35%, the current U.S. rate is the highest in the industrialized world

• GOOD FOR BUSINESSES: Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad

• GOOD FOR SMALL & MEDIUM-SIZED BUSINESSES: Offering a first-ever 20% tax deduction that applies to the first $315,000 of joint income earned by all businesses organized as S corporations, partnerships, LLCs, and sole proprietorships. For Main Street job creators with income above this level, the bill generally provides a deduction for up to 20% on business profits – reducing their effective marginal tax rate to no more than 29.6%.
• Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing growth of jobs, productivity, and paychecks
• Small breweries get relief: Craft breweries in Southwest Washington will save thousands of dollars annually with the passage of our tax cuts bill today. Jaime cosponsored the Craft Beverage Modernization and Tax Reform Act which reduces the federal excise tax brewers pay from $7 per 31-gallon barrel to $3.50.

• MORE JOBS: 7,606 new jobs will be added in Washington state

• BIGGER PAYCHECKS: Middle-income families in Southwest Washington will see on average $773 more in their paychecks due to economic growth (independent Tax Foundation)

• ECONOMIC GROWTH: The independent Tax Foundation projects we’ll see a 1.7% increase in the long-run GDP from these tax cuts, adding substantial revenue and making America competitive globally.

Charge vs. Fact in the Tax Cuts and Jobs Act:

Charge 1: “This bill will cut Medicare, Social Security and Medicaid.”

FACT: The Tax Cuts and Jobs Act doesn’t touch Medicare, Social Security or Medicaid. Social Security and Medicare are trust funds that people spend their working lives paying into so that they have these vital lifelines when they retire.

Many critics of the tax cuts bill insist that congressional leadership will cut Social Security and Medicare as a result of the tax cut bill, but on December 1, House Speaker Ryan and Senate Leader McConnell issued a formal statement pledging to protect these trust funds.

Jaime has pledged and voted to protect and strengthen Medicare, Social Security and Medicaid – and reaffirms that pledge with the passage of this tax cut bill.

Charge 2: “This is fiscally irresponsible and will add more than a trillion dollars to our deficit.”

FACT: The independent Tax Foundation estimates we’ll see a 1.7% GDP increase over the long term, a 1.5% increase in wages, and an additional $1 trillion in federal revenues from economic growth as a result of the Tax Cuts and Jobs Act. Additionally, this bill eliminates billions of dollars in special interest loopholes and tax breaks that have only benefited a narrow segment of wealthy individuals, or that have stifled economic growth. By eliminating these breaks, by incentivizing small and large employers to invest more in their operations, and by lowering the overall tax burden on these employers, private sector businesses will grow and increase revenue, paychecks will grow, and more people will be employed – contributing the necessary revenue to fund these tax cuts.

This method of calculating what a bill will cost and how it’s paid for – accounting for a larger, more robust economy -- is referred to as “dynamic scoring,” which the non-partisan Joint Committee on Taxation has utilized since 2003. 

Charge 3: “This bill is a tax increase on the middle class.”

FACT: All taxpayers will receive a tax cut and see more money added to their paychecks as a result of these tax cuts. The false attack about this bill harming the middle-class was being spread before the Tax Cuts and Jobs Act was even released. In its “Four Pinocchio” rebuke (out of four possible Pinocchio’s – rated a “Whopper”) of the claim that most middle class families would have their taxes increased, the Washington Post fact-checker wrote:

“In their haste to condemn the GOP tax plan, Democrats have spread far and wide the false claim that families making less than $86,100 on average will face a hefty tax hike. Actually, it’s the opposite. Most families in that income range would get a tax cut.”

Charge 4: “This is simply a giveaway to big corporations at the expense of Main Street businesses.”

FACT: Main Street businesses stand to gain substantially from Tax Cuts and Jobs Act in Southwest Washington. This bill will deliver a first-ever 20% tax deduction that applies to the first $315,000 of joint income earned by all businesses organized as S corporations, partnerships, LLCs, and sole proprietorships.

• Small breweries get relief: Craft breweries in Southwest Washington will save thousands of dollars annually with the passage of our tax cuts bill today. Jaime cosponsored the Craft Beverage Modernization and Tax Reform Act which reduces the federal excise tax brewers pay from $7 per 31-gallon barrel to $3.50.

• Other pieces of the bill that will benefit small businesses:
• Small businesses will be able to write off the full cost of new equipment.
• Small businesses will be able to write off the interest on loans used to start or grow operations – and hire more workers.
• Provides immediate relief from the “Death Tax” by doubling the amount of the current exemption to reduce uncertainty and costs for many family-owned farms and businesses