Mullin' It Over Column
The Tax Cuts & Jobs Act, Explained
By Congressman Markwayne Mullin
Washington, December 1, 2017
Tags: Tax Reform
Millions of Oklahomans work hard day in and day out to bring home a paycheck that fits the needs of their family. I believe they deserve better than a 70,000 page tax code full of loopholes and Washington special interests.
That’s why I voted for the Tax Cuts and Jobs Act earlier this month. The House bill simplifies our tax code, reforms the Internal Revenue Service (IRS), and delivers bigger paychecks and fairer taxes for all Americans. The new tax plan is fairer and simpler than before.
First and foremost, under our tax bill, each individual can claim a $12,000 standard deduction and each married couple can claim $24,000. Your standard deduction falls into the ‘zero’ tax bracket and is taxed at 0%.
After the zero tax bracket, think of the brackets like an elevator. You must max out each of the elevator stops (tax brackets) before you can move up to the next one. So, if you are a single filer making $45,001 each year, your first $12,000 will be taxed at 0% and the next $33,000 of your income will be taxed at 12%. The remaining $1 of your income is taxed at a rate of 25%. The further up in the elevator you go, the more tax you will pay on the corresponding income.
A single Oklahoman, without children, who earns $25,000 will not pay a dime in taxes on his first $12,000 after claiming the standard deduction. His next $13,000 in income will be taxed at a rate of 12%. Since we increased the standard deduction, this Oklahoman will pay less taxes on what he earns—minimizing his tax burden and allowing him to spend more of his hard earned dollars how he wants to.
One important tax credit that stays in place is the child tax credit. When it comes to filing taxes, we want to encourage families to grow and lend a hand to those parents with kids under their roof. In the Second District, over 50,000 taxpayers claim the child tax credit each year. If our new tax plan goes into effect, those Oklahomans will be able to claim $1,600 per child--$600 more than the current tax code allows.
A married couple, with two kids, making a combined $95,000 each year, can claim a standard deduction of $24,000, which will be taxed at 0%. Then, they are taxed at a rate of 12% on dollars $24,001 through $90,000. Finally, only their last $5,000 is taxed at 25%. With two children, they can claim a child tax credit of $3,200 on their taxes, and they can claim an extra $1,200 from the newly created family tax credit. This allows them to put away more money in savings for their kids’ education.
We can do better than the current burdensome tax code. Oklahomans deserve to keep more of our paychecks in our own pockets and spend less time each tax season navigating the loopholes in the current tax code.
Washington, DC Office
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