Tax Reform

On Friday November 17, Rep. Paul Cook (R-Apple Valley) voted in favor of H.R. 1, the Tax Cuts and Jobs Act, which was approved by the House of Representatives on a 227-205 vote.

The Tax Cuts and Jobs Act will provide the average family of four in Cook’s district, California’s 8th Congressional District, approximately $1,400 annually in savings. Americans will see these savings on taxes collected next year and pay a reduced amount by April 2019.

H.R. 1 was intended to provide a long-overdue simplification to the tax code – a simplification economists across the spectrum have called for – and that’s what it accomplished.

Currently 65 percent of Cook’s constituents utilize the standard deduction when doing their taxes rather than itemizing. Under H.R. 1, that standard deduction will double to $12,000 from $6,000 for individuals and to $24,000 from $12,000 for married couples.

According to the Joint Committee on Taxation and the Tax Foundation, 91 percent of taxpayers in Cook’s district will see a lower tax liability through the doubling of the standard deduction alone. Additionally, this bill reduces the tax rates for all income levels except for the top bracket, which remains the same at 39.6%. (Click here to see the new tax rates)

In addition to these main benefits of HR 1, it will also provide the following benefits to individuals and families:

• Eliminates special-interest deductions that increase rates and complicate Americans’ taxes – so an individual or family can file their taxes on a form as simple as a postcard.
• Establishes a new Family Credit – which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses.
• Preserves the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
• Preserves the Adoption Tax Credit so parents can continue to receive additional tax relief as they open their hearts and their homes to an adopted child.
• Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
• Streamlines higher education benefits to help families save for and better afford college tuition and other education expenses.
• Continues the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.
• Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000 – providing tax relief to current and aspiring homeowners.
• Continues to allow people to write off the cost of state and local property taxes up to $10,000.
• Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts so Americans can continue to save for their future.
• Provides immediate relief from the Death Tax by doubling the exemption and repealing the Death Tax after six years. Family-owned farms and businesses will no longer have to worry about double or triple taxation from Washington when they pass down their life’s work to the next generation.

Meanwhile for small businesses and job creators, the bill will:

• Reduces the tax rate on the hard-earned business income of Main Street job creators to no more than 25% – the lowest tax rate on small business income since World War II.
• Provides a new, low tax rate of 9% for businesses earning less than $75,000 in income to help the Main Street startups who fuel innovation and job creation in communities across the country
• Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing the growth of jobs, productivity, and paychecks.
• Protects the ability of small businesses to write off the interest on loans that help these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.
• Retains the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.
• Makes it easier for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in our local communities.
• Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.

Taxpayer Stories: 

Family of Four Making $59,000 Per Year

Single Mother Making $30,000 Per Year 

Family of 5 Earning $73,000 Per Year