US Senator John Thune’s Weekly Column: A Once-in-a-Generation Opportunity

A Once-in-a-Generation Opportunity
By Sen. John Thune

One of the main reasons I wanted to join the Senate Finance Committee was for the opportunity to reform and modernize our wildly outdated tax code. Fortunately, that once-in-a-generation opportunity has finally presented itself, and I’m excited by the momentum in Congress that is getting us closer to delivering a pro-growth tax reform bill to the president that will directly benefit middle-income South Dakota families.

The U.S. tax code is like a time capsule. It’s stuck in 1986. More than three decades have passed since Congress has taken a hard look at reforming it. Think about everything that’s changed in the last 31 years. The United States has elected five new presidents, of which three served a full eight years. The internet was invented. For me personally, I’ve watched my daughters grow up, and I now have grandchildren. If that doesn’t put this into perspective, I don’t know what will.

There are a lot of reasons to support the Senate tax reform plan, but I’m particularly interested in all of the positive things it would do to provide relief for middle-income families. First, it doubles the standard deduction for individual and joint filers, which would reduce the tax burden on families. Since fewer people would need to itemize, it would simplify the code, too. Doubling the standard deduction means the first $24,000 of a family’s income wouldn’t be subject to federal income tax. For a family that earns less than $24,000 per year, they wouldn’t pay any federal income taxes at all.

Specifically in South Dakota, the Senate tax reform plan, according to a Tax Foundation analysis of the initial plan, would result in a $2,528 boost in after-tax income for middle-income families and more than 2,700 new full-time jobs for South Dakota workers.

The Senate tax reform plan doubles the child tax credit to $2,000 and expands eligibility, which would help folks who are raising a family and trying to make ends meet. The plan also fulfills one of the most fundamental goals we set out to achieve: It lowers federal income tax rates for all levels of income earners in South Dakota, including those in the bottom-to-middle brackets.

The plan would also reform the tax code for U.S. businesses. For too long, we have been losing jobs to overseas competitors, in part because our businesses pay some of the highest taxes in the industrialized world. This plan would make U.S. businesses more competitive, which would create jobs and increase wages for American workers.

Over the last five years, tax reform has really been a bipartisan issue. During Democrat and Republican administrations, and under Democrat and Republican chairmen of the Finance Committee, we’ve held nearly 70 hearings on tax-related issues. Two years ago, I worked with Sen. Ben Cardin, one of my Democrat colleagues who also serves on the Finance Committee, on a bipartisan proposal to reform the business side of the tax code. This year alone, I’ve introduced multiple bipartisan tax reform proposals, including one that’s cosponsored by the top Democrat on the Finance Committee.

I remain hopeful that bipartisanship will prevail here, too, and that by the end of this process, my colleagues will see the benefits of this plan and realize the real winners of pro-growth tax reform are middle-income American families.

###