House OKs Sweeping Middle-Class Tax Cut
Relief for Students, Seniors and Small Businesses
Includes Buchanan’s Bill to Aid Fla. Orange Growers
WASHINGTON – U.S. Rep. Vern Buchanan voted today to reduce taxes on middle-class families and small businesses across the country. The bill will cut taxes for 95 percent of Americans, according to the Tax Policy Center.
The Tax Cut and Jobs Act, which passed the House 227-203, also included Buchanan’s bill to help Florida orange growers recover from the devastation of Hurricane Irma.
“This bill provides the tax relief that hardworking Floridians have needed for a long time,” Buchanan said. “The average family of four will receive a tax cut of more than $2,000 a year while small businesses will see a significant tax reduction that allows them to expand and create good-paying jobs.”
The bill cuts marginal tax rates at every income level and nearly doubles the standard deduction and the Child Tax Credit. It also benefits seniors by increasing the medical expense deduction for two years.
An independent analysis by the nonpartisan Tax Foundation estimates the tax plan will create nearly 400,000 new jobs and grow the economy by nearly 2 additional percent. It would also contribute to a sorely-needed 1.5 percent increase in wages. Adjusted for inflation, wages have only risen 0.2 percent since 1973.
Local small business owners in Southwest Florida heralded passage of the tax cut. In a letter to Buchanan, Caroline Wetherington highlighted what a tax cut would mean for her Sarasota construction business:
I want you to know how much I am looking forward to tax cuts. We are a small Business in Sarasota FL. We make custom and semi custom homes - Lee Wetherington Homes. We are an S corp and with our current tax situation we have had to lay off employees and we would love to hire them back. PLEASE PLEASE VOTE FOR THE TAX REFORM BILL CURRENTLY BEING CONSIDERED. WE NEED THE RELIEF. – Caroline Wetherington
The National Federation of Independent Business (NFIB) also endorsed the legislation and praised Buchanan’s role in ensuring that small businesses get tax relief under the bill.
“NFIB is grateful to Congressman Vern Buchanan for his steadfast leadership on small business issues,” said Juanita Duggan, NFIB President & CEO. “His sponsorship of the Main Street Fairness Act established the principle that tax reform should start with small business. That principle became one of the pillars of the Tax Cuts and Jobs Act.”
Under this bill, small businesses will benefit from a new 20-percent deduction, meaning businesses making $200,000 a year in business income will not pay taxes on their first $40,000 in earnings.
The tax reform package included Buchanan's Emergency Citrus Disease Response Act, legislation to make it easier for orange growers to replace trees damaged by Hurricane Irma and the deadly citrus greening disease. The federal Agriculture Department unveiled a forecast last week predicting the worst orange crop in 73 years.
Dean Mixon of Mixon Fruit Farms in Bradenton said “Irma took a serious toll on our community and the entire citrus industry is grateful that Vern is helping to provide the relief we so desperately need.”
Highlights of the Tax Cuts and Jobs Act include:
- Doubles the Standard Deduction: Allows families to keep more of their own money by doubling the size of the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
- Doubles Child Tax Credits: Expands the current Child Tax Credit from $1,000 to $2,000 to help parents with the cost of raising children. The tax credit is also made refundable, which means that families that don’t pay any income taxes will receive tax benefits.
- Expands and Preserves Key Tax Relief: Increases the medical expense deduction and preserves the student loan deduction. Specifically, the bill allows all taxpayers to write off qualifying medical expenses that exceed 7.5 percent of income over the next two years. The current threshold is 10 percent. The bill also expands the use of 529 savings accounts designed to help families save for future college costs.
- Simplifies the Tax Code: Americans spend billions of hours each year complying with a tax code that is five times as long as the King James Bible. This bill will allow 9 out of 10 Americans to file their taxes on a new form the size of a postcard.
The tax bill now moves to the Senate where it is expected to be approved and signed into law later this week.