Noem’s Committee Begins Formal Consideration of Tax Reform Bill
WASHINGTON, D.C. – Rep. Kristi Noem today joined the House Ways & Means Committee as they began formal consideration of the Tax Cuts and Jobs Act. According to the non-partisan Tax Foundation, the tax reform proposal – which Noem played a pivotal role in drafting – would increase wages by 3.1 percent, add nearly 1 million jobs, and raise the after-tax income of the average middle-income family.
For the latest information, please visit Noem.House.gov/TaxReform. To watch the proceedings live, please visit WaysAndMeans.House.gov/Live.
“It’s taken decades to get to this point, but it’s essential we get this right,” saidNoem. “For the next week, we’ll be going through the bill line by line, making sure it reflects our priorities of building strong families and a strong future for all Americans. We’re committed to lowering tax rates, expanding pro-family credits, and creating a tax code that respects and rewards hard work. In return, taxpayers will see wages rise and job creation boom. After years of stagnation, it’s critical we act now. I’m eager to finish our committee work on the Tax Cuts and Jobs Act so full House consideration can begin.”
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.###
The most interesting and disturbing thing I’ve noticed in our new reality is that truth is only a matter of perspective. The early reviews on the proposal by the media, real media, has winners and losers coming in most tax brackets. Yet, the talking points are tax cuts and tax reform for all. Stronger families. Strong future. Is this trickle down theory? Seems so.
With respect, the folks trying to split America into winners and losers hope to divide us. Tax reform, while imperfect, benefits the whole country. Let me give an example. If we, as Noem proposed, expand the child deduction to 1600 (and make it fully refundable), who benefits? Parents and kids. What about childless adults? What about senior citizens? Do they benefit from this reform? Not directly. Unless you have young kids, expanding the child credit will not lower your tax bill. When the neighbors, who have 3 kids, pay $600 less in ‘19, it might appear as if they are the winners and you are the loser. This reform won’t *raise* your taxes but, if all you care about is relative wealth, you could deem it a loss. Yet, there’s a good chance you’ll benefit indirectly. If you’re a grandparent, you’re happy that your kids’ tax bill declines. If you own a day care business, you’re glad customers can afford to purchase an extra day per month. And if you’re open-hearted enough to care about the 2030 community, you’re pleased to see benefits flow to those raising the next generation.
The counter-argument: since we (collectively) need to pay down a huge debt, giving parents a tax break raises the eventual burden on everyone else. The hope is that most taxpayers will benefit from at least one of the proposed reforms. If you and your partner have no kids, but together you make less than $25,000 per year, you’ll benefit from the standard deduction increase. It’s true that a couple earning $23,000/ year benefits MORE than a couple earning 27,000/ year. Nevertheless, both couples benefit. Both couples win, IMHO.
When we eliminate the state income tax deduction, people in high tax states (California, Illinois, New York) pay more. People in low (or zero) income tax states are unaffected, but the country as a whole benefits. Likewise, when we eliminate the state property tax deduction, homeowners everywhere will owe the IRS more. People who own multi-million dollar mansions will owe MUCH more. Eliminating these deductions increases tax revenue, allowing us to reduce the deficit and lower income tax rates, incentivizing productive work.
If you say: “But I’m a high-income ($300,000 per year) divorced person with no kids. I live in a 2.5 million dollar Malibu bungalow. This reform doesn’t help me!” You may have a point. Not every single American gets a cut. Unless the bill is amended by the Senate, some wealthy individuals will pay more taxes. The good news: if we simplify the code, people will save by filing IRS returns without paying a CPA. If I need to send Uncle Sam an extra $950, but I can easily prepare and file my own taxes, I’m happy with it.
If only Washington would reduce the deficit and ultimately the national debt
True. We need to get our (fiscal) house in order.
Not being able to deduct property taxes will really hurt agriculture, especially in western South Dakota where farmers and ranchers can barely afford to pay the horribly high property taxes now.
Not to worry, Ree. They amended the bill to keep the property tax deduction.
“House Ways and Means Chairman Kevin Brady and other House GOP leaders sought to end the federal deduction for state and local taxes that people pay. But legislators from high-tax districts in New York, New Jersey, and California pushed back, saying it would amount to a tax increase on their constituents. Brady announced: “At the urging of lawmakers, we are restoring an itemized property tax deduction to help taxpayers with local tax burdens.” The Republicans’ decision to keep the itemized deduction for state and local property taxes could quell a revolt by lawmakers from high-tax states…”
Expect the Senate to follow suit.
Now watch, if if passes the Senate, they won’t implement it until after the 2018 election. If it’s a good bill do it now. Don’t play politics. No excuses.