Column: Tax relief for working families
Congress has passed historic tax relief for American families.
I supported this legislation because it will let hardworking Michigan residents keep more of their own money.
The legislation doubles the standard deduction for individuals and married couples to $12,000 and $24,000 respectively, meaning they will pay zero percent tax on that money.
The legislation also doubles the child tax credit to $2,000 per child for working parents.
This is a pro-family policy that will help residents who are living paycheck to paycheck, and many have told me what increasing the tax credit would mean to them.
“Increasing the child tax credit would mean a lot for my family. The cost of everything is going up and our paychecks are not getting any bigger. The tax credit would give us money back,” is what a mother in Beaverton told me.
“It would help our family immensely: clothing, bills, diapers, food, and the list goes on,” said a father from Perry.
“We’ll be able to afford new clothes for the kids,” said another dad, this time from Eagle.
Even those who are not eligible support increasing the child tax credit.
“We are retired but I would like to see young families get relief,” said one Sanford resident.
With this real tax relief, not only will these families save more money in April 2019 when they file their annual income taxes, they will also see more in their paychecks, possibly as soon as February, as new lower tax rates take effect and the IRS withholds less money from their paychecks.
Of course, the historic tax reform passed by Congress is about more than the child tax credit.
Deductions for medical expenses, charitable contributions, mortgage interest, adoption expenses, and state and local taxes will continue.
In education, the $250 deduction for teachers buying school supplies remains, as does the interest deduction for student loans. The exemption for graduate students receiving tuition waivers also remains.
In addition to tax relief for families, there is also tax relief for small businesses.
So many of the partnerships, LLCs and S corporations that make up the small businesses on Main Street in our communities are taxed at more than 39 percent.
“I have an S Corp; all profits become my personal income,” said one business owner from Alma.
Under this new law, his effective tax rate would be no more than 29 percent.
That is a huge savings for small businesses and many have said they will share it with their workers.
“We can spend more money in the community and hire, or give raises,” said a St. Johns business owner.
“This would be a huge incentive to invest in higher wages, better benefits and new equipment for our business,” said another from Cadillac.
Finally, it’s important to note that so many defenders of the broken status quo have resorted to scaring people about tax reform, saying that it threatens funding for the safety net that so many folks depend on.
This is not true, and I will be working to keep the promises the federal government has made to our seniors.
Lower tax rates, a bigger standard deduction, a bigger child tax credit and bigger paychecks means more money for Michigan families, small businesses and our communities.
I am proud to support real tax relief for our state’s families.
U.S. Rep. John Moolenaar, R-Midland, represents Michigan’s 4th Congressional District.