Tax reform helps create more opportunity for Marietta families
For too long, our tax code has held back rather than helped middle-class families. Expenses have gone up–healthcare being the biggest expense–and wages have been flat for more than a decade. With the new tax reform law, we are making the American Dream more than just a dream for middle-class families in Marietta and across the state–it can once again be a reality.
The Tax Cuts and Jobs Act, which was signed into law before the first of the year, lets middle-class families keep more of their money rather than it going to Washington and creates a more competitive tax code for American workers and businesses.
The new law cuts taxes across the board for middle-class income groups. Last month, the IRS updated its employee withholding charts to reflect these tax cuts and the savings are reflected in your paychecks starting this month. If you want to see whether this tax reform is doing what it’s intended to do, the proof is in your paycheck.
In addition to lower tax rates, the new law also doubles the standard deduction to $24,000 per family and doubles the child tax credit to $2,000 per child. These combined changes will take more than three million Americans who previously had federal income tax liability off the tax rolls altogether, and the median income family of four can expect to save $2,000 a year on their taxes.
For people in Marietta, or others across the state, that extra money can help make a car payment, save for retirement, or provide the many Ohio families I represent that live paycheck-to-paycheck a chance to get ahead financially.
In addition to the individual tax cuts, the business tax reforms in this law are benefitting Ohio workers directly. The most recent federal jobs report shows strong job gains and the fastest wage growth since 2009. Part of that is from the increased opportunity and optimism from tax reform.
I recently visited Sheffer Corporation in Cincinnati with President Trump. Sheffer is a small manufacturing business that announced new investments in plants and equipment and $1,000 bonuses for all 126 of the company’s employees as a result of the savings from this tax reform. I’ve also visited small businesses in Columbus, Cleveland, and Dayton that have announced plans to buy new equipment, hire new workers, or increase employee compensation or benefits with the money they are saving from tax reform.
The new tax code’s lower business tax rate, immediate expensing, and updated international tax code have already benefitted businesses small and large in Ohio. Walmart, Ohio’s largest employer, as well as JPMorgan Chase, Nationwide Insurance, Fiat Chrysler, and more announced reinvestments in their operations and workers as a result of this tax reform. By lowering our business tax rate below the average of other industrialized countries, we are increasing American competitiveness in the global market, and by updating our international tax code, we are telling companies to invest here in the U.S. rather than countries overseas.
In addition to the income tax savings and business tax reforms, I’m proud of the tax incentives we preserved in the final version of this law. As a member of the Senate tax-writing committee and the House-Senate conference that negotiated the final bill, I successfully fought to protect important tax incentives for Ohioans that were threatened in earlier versions of the bill. Notably, we preserved the Historic Tax Credit and New Markets Tax Credit, which both help leverage private funds for community renovation projects that increase economic development in Ohio. I also helped preserve tax incentives for higher education to make school more affordable for Ohio families and protections to help ease the burden of medical expenses for seniors and preserve retirement security for workers.
This historic tax reform frees our workers, families, and businesses from the burdens of our previously outdated tax code. The new law helps create a healthier budget for Marietta families, more opportunity for Ohio workers and businesses, and a brighter future for our country.
U.S. Senator Rob Portman (OH), 37 West Broad St., Room 300, Columbus, Ohio 43215.