This week, Republicans in the U.S. House of Representatives introduced a plan to deliver tax relief to Iowans who need and deserve it the most: the hardworking middle class – the backbone of the Iowa workforce and economy. The bill, the Tax Cuts and Jobs Act, smashes the status quo tax system that has rewarded those who could afford expensive tax lawyers and lobbyists.
The plan’s main focus is to help middle class folks who have struggled too long living paycheck to paycheck and sometimes working more than one job. Because we are smashing the status quo, you are going to hear a lot of special interests complaining about the relief plan, but that’s because loopholes snuck into the tax code will be closed and they will have to start paying their fair share. Which is only fair.
The typical Iowa middle-class family of four will pay $1,182 less in taxes than last year. This means they get to keep more of their hard-earned paycheck to pay bills, buy new appliances, save, take a family vacation, or simply exercise their freedom to do whatever they want with it.
We have simplified the tax code and established a new zero percent tax rate. This means Iowans currently paying in the 10 percent bracket will now pay nothing, not one penny, in federal income tax. We also keep the 39.6 percent tax bracket for the highest earners. This keeps the focus where it belongs: on tax relief for lower-income and middle class families.
For example, Nancy lives in Adair County. She has worked her entire life, slowly but surely being promoted to higher level positions. She is a single mother, working hard to support herself and her 14 year-old son. Nancy, like many Iowans, needs more money to keep up with increasing everyday costs.
To help folks like Nancy and families across the district, we have included a new “Family Credit” to help middle class families thrive. We expand the child tax credit, from $1,000 to $1,600 and add a new $300 credit for helping families take care of a non-child dependent like a parent or grandparent.
Alan is a police officer serving the Iowa community he grew up in and loves. He makes $49,000 annually and is currently seeing 25 percent of his paycheck go to the IRS. Under our plan, Alan would fall into the new 12 percent bracket, meaning he would pay 50 percent less under our plan than he pays right now. When combined with doubling the standard deduction – to $12,000 for individuals and $24,000 for couples – he will keep even more of his paycheck to save or spend as he wishes.
Those are just two examples of hardworking middle class Iowans who will see historic tax relief under the GOP bill. I trust Iowans to spend and control their money better than the federal government. When folks across the Third District are taking home more of their hard-earned paycheck, the economy grows and creates new jobs and larger paychecks.
Smashing the status quo tax code is what Iowans want to see, and this new plan delivers what Iowans need – more money in their pockets, a simpler and fairer tax code, and bigger paychecks.
This is an historic moment. And we must seize this opportunity to grow and strengthen the economy, create good paying jobs for Iowans, and let individuals keep more of their hard-earned paychecks, and spend their increased take-home pay as they see fit.