Noem: Tax Reform Means Stronger Families and a Stronger Future
WASHINGTON, D.C. – Rep. Kristi Noem today announced the release of a once-in-a-generation tax reform package which aims to strengthen families and offer a stronger future for all Americans. The legislation was drafted by the House Ways and Means Committee, on which Rep. Noem is the first South Dakotan in history to serve. For the latest information, please visit Noem.House.gov/TaxReform
“People deserve a break,” said Noem. “For years, we’ve watched as energy, food, healthcare and child care costs increased, but people’s paychecks remained largely unchanged. Small businesses have had a hard time expanding in that type of environment, and families have struggled to achieve the degree of financial independence they’re aiming for. In order for America to move beyond this, we need a tax code designed to strengthen our families and offer a more optimistic future. While no proposal will be perfect in everyone’s eyes, the Tax Cuts and Jobs Act would make the tax code much more simple and fair, delivering family-friendly credits, lower tax rates, small business incentives, and, ultimately, a full and permanent repeal of the Death Tax. It’s taken years to get to this point, but I’m encouraged by the progress and look forward to continuing this debate in upcoming committee meetings.”
The tax reform package released today would:
- Substantially simplify the tax code so an individual or family can file their taxes on a form as simple as a postcard.
- Significantly lower individual tax rates for low- and middle-income Americans to Zero, 12%, 25% and 35%. High-income Americans will maintain the 39.6% rate.
- 0%: Married couples making less than $24,000 / Single filers making less than $12,000 (the increased standard deduction protects these families from taxation)
- 12%: Married couples making $24,000-$90,000 / Single filers making $12,000-$45,000
- 25%: Married couples making $90,000-$260,000 / Single filers making $45,000-$200,000
- 35%: Married couples making $260,000-$1,000,000 / Single filers making $200,000-$500,000
- 39.6%: Married couples making more than $1,000,000 / Single filers making more than $500,000
- Nearly double the standard deduction to $24,000 for married couples and $12,000 for single filers.
- Provide unprecedented support for families.
- Increases the Child Tax Credit to $1,600 per child (60% larger than under current policy).
- Eliminates the “marriage penalty.”
- Creates a new Family Flexibility Credit, which provides a credit of $300 for each parent and non-child dependent.
- Preserves the Child and Dependent Care Tax Credit (also known as the Child Care Credit) to better support working parents.
- Phase in full and permanent Death Tax Repeal by doubling the Death Tax exemption levels for the first six years and then fully repealing the Death Tax by 2024.
- Preserve and strengthen the Earned Income Tax Credit with provisions to stop widely reported fraud.
- Preserve the Home Mortgage Interest Deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000.
- Retain popular retirement savings options, such as the 401(k)s and Individual Retirement Accounts.
- Streamline higher-education benefits.
- Continue the deduction for charitable contributions.
- Exclude the Indian Health Service’s Student Loan Repayment program from tax to help in recruiting. It’s based on Noem’s 2016 legislation.
- Allow businesses to immediately write off the full cost of new equipment, which is critical for South Dakota’s agriculture community.
- Create a separate and historically low small business tax rate.
- Lower the corporate tax rate to a globally competitive 20%.
Noem was selected for the House Ways and Means Committee in January 2015. Just over a year later, the committee released a blueprint for tax reform that outlined what a pro-growth, pro-family tax plan would look like. Over the course of the next year, Rep. Noem sat down with hundreds of South Dakotans to discuss the plan – both in the state and in her Washington, D.C. office. Noem also participated in more than a dozen formal Ways and Means Committee hearings on tax reform and brought South Dakota farmer Scott VanderWal to the table to testify on tax reform’s impact on agriculture.
All in all, the House Ways and Means Committee has been working on this proposal for more than six years, holding more than 40 public hearings since 2011.