At the end of last week, while most of America was focused on the action in the Senate, the House passed a series of bills, which we’re calling Tax Cuts 2.0. The Protecting Family and Small Business Tax Cuts Act provides American families and small businesses the certainty they need by making the individual tax cuts from the Tax Cuts and Jobs Act permanent.
The American Innovation Act makes it easier for an entrepreneur to start a new business by providing a higher deduction threshold for start-up and organization costs in a business’ first year. Currently, taxpayers may deduct up to $5,000 in startup costs for new small businesses. This bill would allow entrepreneurs to deduct up to $20,000 in organizational costs during the business’ first year! This new threshold will give bright, ambitious entrepreneurs relief from tax burdens they currently face when trying to start a new business in America.
Tax reform 2.0 includes:
- Lower individual rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
- Doubling of the standard deduction to $12,000/$24,000, for single or joint filers, respectively.
- Doubling the Child Tax Credit to $2,000 with up to $1,400 refundable.
- Retention of popular deductions like mortgage interest (capped at $750,000 for new homes), state and local taxes (capped at $10,000), medical expenses, and charitable deductions.
- 20% tax deduction for small business owners.
I voted for this bill because I believe taxpayer dollars do not belong to Washington. They belong to hardworking Americans. Americans not Washington bureaucrats best know how to spend it. I was pleased to vote for these tax cuts last year and I was thrilled to vote to make them permanent last week.
After the historic Tax Cuts and Jobs Act, unemployment is at a historic low, job openings are at record highs, paychecks are growing and wages are rising along with economic optimism. Last Friday, we took the next step by passing this bill to make the tax cuts for individuals, families and small businesses permanent in law.
Congressman Daniel Webster represents The Villages in the U.S. House of Representatives.
