Last February, Sen. Heidi Heitkamp said, “We also must make sure that any tax reform has to work for families just trying to put food on the table.”
Now, there’s legislation to provide relief to taxpayers and reduce the stifling corporate rate so the economy can grow.
Even using questionably low assumptions put forth by fierce opponents of the plan, the Family Business Coalition found that the middle class comes out ahead. A couple with two young children, earning the median income of $87,000 will get a tax cut of more than $1,200. A single mom with two kids earning $41,000 will be taken entirely off the income tax rolls and pay nearly $500 less in taxes.
On top of individual tax savings, the plan’s proposed reduction of the corporate rate, from a globally uncompetitive 35 percent down to 20 percent— will attract businesses and investment, grow the economy, and boost take-home pay for hard working Americans.
According to researchers at Boston University, this corporate rate cut could increase income by an average of $3,500. And the White House Council of Economic Advisers estimated disposable income will go up by $4,000 conservatively, or perhaps by even more, estimating it could be as high as $9,000.
History shows tax relief is a win for the middle class. Five years after the President John F. Kennedy tax cuts of 1964, quarterly economic growth averaged 5.2 percent and average per-capita income was up $2,243. The same thing happened in the years after the 1981 President Ronald Reagan tax cuts when the economy grew at an average rate of 5 percent, added nearly 12 million jobs and take-home pay increased by more than $2,700 per person.
And now, a generation later, Congress is on the brink of making it happen again. This time it’s bolder.
In addition to lowering rates and reducing the number of brackets to simplify the code, the plan would eliminate the loopholes and carve outs that rig the system in favor of the powerful and well-connected.
Do you know any hardworking families that couldn’t use an extra $4,000 in their bank account? Or a single mom who wouldn’t jump at the chance to have a job that pays more so she can work fewer hours?
When Reagan championed tax reform from the Oval Office in 1985, he said, “Let’s not let this magnificent moment slip away … Let’s not let prisoners of mediocrity wear us down. Let’s not let the special interest raids of the few rob us of all our dreams.” It’s time to stand firm once more.
As for Heitkamp, in September she said, “Ask any small business owner, energy industry worker, farmer or parent in North Dakota about what they think of the current U.S. tax code and they’ll most likely tell you that it’s broken.”