Today, Congressman Don Bacon (NE-02) joined House colleagues by voting to give Nebraskans and the American people pro-family and pro-business tax relief. Once enacted, the Tax Cuts and Jobs Act will give them more resources to cover the costs of their livelihoods.
“The Tax Cuts and Jobs Act will give the typical family of four earning the median income of $73,000 a tax cut of $2,059,” said Rep. Bacon. “Families also will benefit from the expanded Child Tax Credit for those making under $400,000.”
In addition, Nebraska families with existing home mortgages will still be able to deduct their current mortgage interest deduction. Homeowners with new mortgages on a first or second home will be able to deduct mortgage interest on the first $750,000 of principal.
This legislation will also maintain the Adoption and Child and Dependent Care Tax Credits; the tax exemption for the value of reduced tuition for graduate students; the exemption allowing teachers to deduct the out of pocket cost of classroom supplies; and popular retirements savings options such as 401(k)s and Individual Retirement Accounts (IRAs).
“People in the Second District voiced their support for the larger standard deduction and simplification of the tax code, but expressed the need to keep mortgage interest and other deductions,” added Rep. Bacon. “This will help Nebraskans grow their families, further their education and keep more of their hard-earned paychecks.”
In addition, the individual mandate tax penalty has been eliminated to allow families the flexibility to buy a health care plan that’s right for them.
“We have Nebraskans who are paying upwards of $30,000 a year in premiums, and yet they are still not receiving health care because of their high deductibles,” added Rep. Bacon.” Nebraska families simply cannot afford these high costs and not receive the care they need.”
Nebraska businesses will also benefit from the Tax Cuts and Job Acts because it will deliver significant tax relief to Main Street job creators. Businesses organized as S Corporations, partnerships, Limited Liability Corporations (LLC’s) and sole proprietorships will be able to take a first-ever 20 percent tax deduction that applies to the first $315,000 of joint income. Those with income above this level will generally see a deduction for up to 20% on business profits that will reduce their marginal tax rate to no more than 29.6 percent.
“Just like Nebraska families, our local businesses need to retain certain deductions to reduce their overall tax burden,” said Rep. Bacon. “Small businesses spur the economy and this bill gives them the tools they need to grow by allowing them to immediately write off the full cost of new equipment and encourage investment. Greater investment will spur growth in jobs, productivity, and employee paychecks.”
Also retained is the ability of small businesses to write off interest on loans; the low-income housing tax credit encouraging businesses to invest in affordable housing for American families; the tax-preferred status of private-activity bonds that are used to finance critical infrastructure projects; and the Research & Development Tax Credit, which encourages businesses to develop “Made in America” products and services.
Businesses of all sizes will benefit from the lowered corporate tax rate of 21 percent, down from 35 percent- the highest in the industrialized world.
“This reform effort will also allow American businesses of all sizes to compete in the global economy,” said Rep. Bacon. “When we last reformed our tax code in 1986, our business tax policies were on par with our global competitors, but our competitors have changed their tax policies and left the United States and American businesses behind. Today, we are fixing that disparity and putting American businesses back on a level playing field in the global economy.”
“I am glad to see this pass the House and I await the Senate’s approval as hard-working Nebraskans deserve tax relief,” he added.