If you only listened to Democrat politicians and their allied special interests, you wouldn’t know that the tax relief proposals being considered in Congress have many family-friendly, worker-friendly, and small business-friendly reforms to give us bigger paychecks. While the House and Senate versions are different and a compromise between the two must still be reached, let’s consider what they are offering.
First, both bills — the one supported by Congressman Bruce Poliquin in the House and the one supported by Senator Susan Collins in the Senate — essentially double the benefit of the ‘standard deduction’. If this reform becomes law, individuals will be able to increase from $6,000 to $12,000 the amount of money they pay zero taxes on. For families, this deduction will increase from $12,000 today to a whopping $24,000. As Senator Collins told the Bangor Daily News this week, “A family with an income of $24,000 would no longer pay income tax.”
Next is a reform that is important in an aging country with a declining birthrate, and one of particular importance to the future of Maine–the oldest state in America. That reform is a dramatic increase in the child tax credit. In the House bill, the child tax credit increases from $1,000 today to $1,600. The Senate version would increase it all the way to $2,000. For a household with two children, that’s an automatic $4,000 refund from the Federal government. Senator Collins noted that under the Senate bill, “A single mom with one child earning $35,000 would receive $1,100 back from the government, rather than owing income tax, which would certainly be helpful to her in making ends meet.”
Both the House and Senate bills also have reforms to make small businesses — the backbone of Maine’s economy — more competitive. The House bill creates a safeguard that makes sure the top tax rate on small businesses cannot be higher than 25 percent. As Congressman Poliquin has noted, this would be the lowest rate since World War II. The Senate bill lowers rates for so-called ‘pass-throughs’, income filed as individuals when in fact the filer is a small business. While the differences in the two bills will be resolved, both proposals represent a major improvement over the status quo for Maine’s small businesses.
One criticism of the House and Senate bills has been limiting the State and Local Tax, or SALT, deduction. While this deduction can lower the burden for low and middle income earners, it also serves as a bailout for high tax states to prevent taxpayer revolt in states like California and New York. Because the current deduction is nearly unlimited, it is a special favor to wealthy elites in places like Hollywood and Wall Street. To address the unfairness of current law, both the House and Senate tax relief bills maintain some of the SALT deduction for middle Americans, while limiting it so that it no longer finances the wealthy in high tax states. If this reform becomes law, it will have the added benefit of putting pressure on some states to ease the burden they place on their taxpayers.
Another important deduction, especially for Mainers, is the medical expense deduction. These medical costs, we all know, can spiral out of control, and allowing people to deduct some of the money they spend on medical care is good policy. Upon passage of the House tax relief bill, Congressman Poliquin immediately said he will fight to restore the medical expense deduction. And in the Senate, Senator Collins successfully fought to increase the size of this deduction.
Upon the Senate passing its bill, Congressman Poliquin stated, “My colleague Senator Collins helped to make improvements to this proposal that I strongly support and that will benefit Maine families and small businesses, such as retaining the medical expense deduction and improving the provision dealing with historic tax credits.”
Again, this is good for the country and good for Maine, and further proof that our Republican representatives in Congress are fighting to make tax reform benefit US–We The People.
Yet while Maine’s and the country’s congressional Republicans are working through the difficult process of reforming our complicated tax code so that it helps families, workers, and small businesses, sadly Maine and national Democrats are trying to block these reforms at every step while offering no reforms of their own.
Last week, Maine State Senator and U.S. Senate candidate Eric Brakey put it well when he said, “Angus King has reached new heights of hypocrisy in his opposition to tax reform. Refusing to work in a bipartisan manner, King obstructs with cheap Washington swamp tactics. Rather than explaining why he opposes tax cuts for Maine people, he balks at the process, saying there hasn’t been enough discussion… even though tax reform has been discussed and worked in committee for the last seven years.”
The bottom line is this: Maine Republicans appreciate the challenge of the task at hand and are working their tails off to get this done right and allow working Mainers to have bigger paychecks, while Democrats seem content to let government keep more of your money.
We still have a ways to go, but we have confidence in our state’s representatives being national leaders as this process continues. As Vice President Pence said this week on The Howie Carr Show, “Thanks to Republicans in the House and Senate, we are one step away from passing the biggest tax cut in American history.”
