Congressional Republicans have passed significant, across-the-board tax cuts that will benefit all Americans.
The tax bill will reduce individual tax rates at all income levels and slash business taxes to an unprecedented degree. While the plan preserves a handful of distortionary deductions and credits, including a $10,000 state and local tax credit to help those living in high-tax states, the bill also dramatically simplifies the tax code.
Despite media accounts to the contrary, the bill provides the biggest proportional tax cuts to ordinary Americans. Families with children earning roughly the national median income of $59,000 will see their income tax liability disappear entirely under this bill. Those earning $75,000 will see their tax bill fall by half.
How? The bill includes a number of provisions to significantly help ordinary taxpayers. For example, it doubles the standard deduction to $24,000, meaning the roughly 25 percent of American families who earn below that threshold will pay no tax at all.
The bill also reduces middle class tax rates, including eliminating the 15 percent tax rate, which currently takes effect at just $18,650, in favor of a vastly expanded 12 percent rate.
Recognizing the increasing expense of childcare, the bill also doubles the child tax credit to $2,000, which will disproportionately help ordinary families.
One of the most exciting aspects of this bill is the long overdue relief it offers small businesses.
Currently, the vast majority of small businesses pay tax at individual rates, which reach 40 percent of marginal earnings. According to many small business surveys, this tax burden is the main challenge small businesses face. And because small businesses are the backbone of the American economy, providing two-thirds of all new jobs, such over-taxation also hurts employees, jobseekers, and communities.
The tax bill will address this over-taxation by creating a new 20 percent small business tax deduction, which will allow entrepreneurs to keep more of their earnings necessary to hire, raise wages, expand, and thrive.
This tax cut will inspire thousands more would-be entrepreneurs to start their own business, reversing the decades-long slide in new small business creation.
Similarly, the bill's significant corporate tax cuts will put American companies on a level playing field with their international competitors which face a much lower tax burden. This will reverse the flow of U.S. businesses abroad, creating prosperity at home not only for Americans who work at these businesses but also for the communities where they are located.
As someone concerned about the nation's $20 trillion debt, I am receptive to the budget concerns with the tax bill. (Though I do find it a little ironic that those sounding the deficit alarm stayed quiet while the last presidential administration racked up $8 trillion of national debt.)
But the reality is that the only way to address the national debt - barring seemingly politically unpalatable spending cuts - is through economic growth. And that's exactly what this tax bill can help the country achieve.
According to a recent U.S. Treasury analysis, the tax bill will generate significant economic growth that will lead to increased tax revenues that will more than cover the bill's costs.
This tax bill is a gift to all Americans, especially those living on fixed incomes, who will be able to keep a little more of their hard-earned money to cover the increasing costs of living.
And the economic growth it will deliver in the years ahead may be the real gift that's still to come.
Jennifer Schubert-Akin is the Chairman and CEO of The Steamboat Institute.