This week, the House and Senate delivered a gift to the American people—just in time for Christmas. Congress passed a historic overhaul of our nation’s tax code by way of the Tax Cuts and Jobs Act. This Christmas, Oklahomans should be excited that four out of every five taxpayers are going to get a tax cut come the new year, according to the Tax Policy Center.
The Tax Cuts and Jobs Act roughly doubles the standard deduction and allows individuals to deduct the first $12,000 of their salary from their taxes. Married couples who file jointly are eligible to claim the first $24,000 tax-free under the standard deduction. By increasing the child tax credit to $2,000 and maintaining the adoption tax credit, we’re encouraging families to grow—not discouraging people from having kids or adopting.
For example, take Sue and Bill from Muskogee who have two kids in high school. Sue works as a teacher in the Oklahoma school system and Bill works a good-paying manufacturing job. Together, they make just under $60,000 each year. Come tax season, they can claim a standard deduction of $24,000 and an additional $4,000 child tax credit. Sue and Bill are going to keep $1,643 more of their paychecks. They can put that money to good use within their own family by saving for college, a dream vacation, or Christmas presents under the tree for their kids.
For small businesses, tax reform this Christmas brings a prosperous new year with more growth, more jobs, and more investments in their communities. Over the last decade, small businesses have felt the burdensome effects of excessive regulations and a complicated, long-winded tax code. For IRA Green Construction, a family-owned business in Claremore, their success is stifled by red tape and compliance costs. The Tax Cuts and Jobs Act lets small businesses deduct up to 20% of their income, reducing their effective marginal tax rate to no more than 29.6%. It also allows for businesses to immediately write off the full cost of new equipment, so businesses like IRA Green Construction can invest more in their employees, machinery, and facilities.
This Christmas, Congress delivered on a promise we made to the American people years ago. We made bold reforms to the over 30-year-old tax code so that hardworking, middle class Oklahomans keep more of the money they earn. This holiday season, our gift is a tax cut to taxpayers, which should make for a very, merry Christmas in Oklahoma.