House Republicans achieved a historic legislative victory on Thursday, passing a sweeping tax-reform package that will create jobs, increase paychecks and make the tax code simpler.
The pro-growth tax reform package sailed through the House by a vote of 227-205. No Democrats voted for the bill, while a mere 13 Republicans—all from states with high state and local tax rates—broke ranks to oppose it.
“This country has not rewritten its tax code since 1986. The powers of the status quo in this town are so strong. Yet 227 men and women of this Congress broke through that today,” Speaker Paul Ryan said after the vote. “That is powerful.”
Tax reform is hard. After all, there is a reason that it took thirty years to get fundamental tax reform over the House finish line. Inevitably, sacred oxen get gored, the result of cleaning out credits, deductions and other tax code loopholes that benefit one or another special interest in order to lower the rates for as many people as possible. Not everyone can afford high powered lobbyists to pursue a loophole, or even a tax lawyer to take advantage of the tax codes deep secrets, which means that the people who need the most help are the ones left the furthest behind.
This makes tax reform an absolutely necessary, but deeply difficult task.
But this Congress fought through any challenges, ignored all the naysayers and special interests and moved decisively to keep more money in the pockets of more people. Under this bill, the average household of four, making $59,000 each year will see a $1,182 tax cut in the first year alone. That’s an incredible amount of money for a family who is living paycheck-to-paycheck, searching for any slack to take care of their family, dig out from debt, or begin investing to get ahead.
“Tax reform is so very hard. But we know that there are people who are really struggling in this country. We know that we are just coming through a decade of real economic anxiety,” Ryan said. “And we know that this is a nation that has so much more potential that has not yet been tapped. That’s what this day is about. That’s what getting this done is about.”
The relief for hardworking taxpayers is enormous. The Joint Committee on Taxation estimated that every income group would see a tax cut on average under the legislation in 2019, the result of collapsing the tax brackets from seven to four, doubling the standard deduction, and increasing the child tax credit, among other changes. Perhaps more importantly the bill’s significant changes for job creators, including lowering the corporate tax rate from 35 percent to 20 percent, reducing tax rates for new and small businesses, and preventing the double taxation of foreign-earned income, will jumpstart economic growth, create new jobs and raise wages.
For too long our economy has either been sliding backward or staying stagnant. Our leaders attempted to convince us that there was nothing that could be done, that we were entering a “new normal” of slower growth. This bill is about refusing to accept that slide toward listlessness and instead reinvigorate our engines of growth.
“This is a historic moment for the American people,” said Rep. Kevin Brady. “Today we give hope to middle-income families and Main Street job creators in Texas and across the country that a brighter future is on the horizon – a future where you can keep more of what you earn, start that new business, find that next job, and get that long-overdue raise. This vote is a big step forward – but it is not the last step. We will continue to strengthen this legislation and, working with the Senate, we will put tax reform on the President’s desk by the end of the year for the first time in 31 years.”
Indeed, this is just the first major step towards fundamental reform. Attention now shifts to the Senate, which will begin debating similar legislation soon with the hope of passing a bill and moving to conference the bills before the new year. That’s an incredibly difficult process, but providing much-needed relief for cash-strapped Americans is the best motivator there is.