King: “Tax Cuts and Jobs Act is an Early Christmas Present to American Taxpayers.”
Congressman King Heralds Historic Tax Reform Bill’s Benefits to Iowans
Washington, D.C.- Congressman Steve King released the following statement after voting in favor of HR 1, the Tax Cuts and Jobs Act. The legislation marks the first significant reform to the nation’s tax laws in more than 30 years, and it contains numerous provisions that provide welcome relief to Iowans at all income levels. In addition to lowering federal taxes for individuals, families, small businesses, and corporations, the final legislation also repeals the ObamaCare Individual Mandate tax currently levied on those who choose not to purchase health insurance. King, a leader in the effort to repeal ObamaCare in its entirety, previously asked Chairman Kevin Brady and Chairman Orrin Hatch to include repeal of the Individual Mandate in the final tax bill. The legislation passed the House of Representatives today by a vote of 227-203 and, when passed by the Senate, it is expected that President Trump will sign the bill into law.
“Passage of the Tax Cuts and Jobs Act is an early Christmas present to American taxpayers,” said King. “When this bill becomes law, the American economy will be poised to have both a Happy New Year and a Happy New Decade of 3% GDP growth or more. The Tax Cuts and Jobs Act is a welcome gift to everyone who believes Americans should be allowed to keep more of their hard earned money. I look forward to Iowans enjoying the jobs and income growth that will result from this bill over the coming years.”
“Importantly, this bill repeals the Individual Mandate in ObamaCare. This is the most concrete step that Congress has taken towards repealing ObamaCare, and it sets the stage for me to lead additional repeal efforts in 2018. ObamaCare is the coal in America’s stocking, and we need to rid ourselves of it.”
Provisions Important to Iowans:
The Tax Cuts and Jobs Act will strengthen Iowa’s economy. Specifically, an analysis prepared by the independent Tax Foundation estimates that passage of this legislation will lead to the creation of 3,682 full-time equivalent jobs in Iowa, and that after-tax incomes for middle income families in Iowa will increase by $650.03.
The Tax Foundation estimates that, nationally, passage of the Tax Cuts and Jobs Act “would result in the creation of roughly 339,000 new full-time equivalent (FTE) jobs, while increasing the after-tax incomes by 1.1 percent in the long run, meaning families would see an after-tax income boost of 1.1 percent by the end of the decade.”
The House Ways and Means Committee analysis of the bill projects that the typical family of four, earning the median family income of $73,000, will receive a tax cut of $2,059.
Iowans are particularly hard-hit by ObamaCare’s Individual Mandate tax penalty, an unjust tax which falls disproportionately on low-income earners. In Iowa, 82% of those paying the ObamaCare Individual Mandate tax make less than $50,000/yr. This figure is only 80% nationally. The repeal of this penalty will be an enormous relief to the 52,000 Iowans who paid it in 2015, and will restore the principle that the federal government does not have to authority to force citizens to purchase products from private companies.
The 4th District is also home to Iowa State University, and the Tax Cuts and Jobs Act preserves current benefits to higher-education, such as tax-free tuition waivers and the ability to deduct student loan interest payments.
Among the provisions benefitting Iowans in the Tax Cuts and Jobs Act are:
• Lower Individual Rates: Lowers individual tax rates to 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
• Increased Standard Deduction: Like the House and Senate bills, roughly doubles the Standard Deduction – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples. 89,133 taxpayers in the 4th District itemize their taxes. As a result of the standard deduction being increased from $6,350 to $12,000 for individuals (and from $12,700 to $24,000 for married couples), many filers will have simpler taxes and a larger total deduction to take.
• Expanded Medical Expense Deduction: Provides relief for Americans with expensive medical bills by expanding the medical expense deduction for 2018 and 2019 for medical expenses exceeding 7.5% of adjusted gross income.
• Increased Child Tax Credit: 58,340 taxpayers in Iowa’s 4th District claim the child tax credit, and this legislation increases the credit from $1,000 to $2,000.
• Charitable deduction preserved.
• Death Tax Relief: Provides immediate relief from the Death Tax by doubling the exemption amount from $5.49 million to $10.98 million.
• State and Local Taxes remain deductible: Up to $10,000, just like current law.
• Favorable Tax Treatment for Students, Higher Education Preserved: Tuition waivers received by graduate students remain tax-free and students can still deduct loan interest payments.
• Internationally Competitive Corporate Tax Rates: Lowers the corporate tax rate to 21% --down from 35%-- making American companies more competitive against foreign entities.