Congressman Tom MacArthur votes to permanently lower federal taxes
The Tax Cuts and Jobs Act or "Tax Reform 2.0" is about to have some permanent impacts on taxpayers.
Congressman Tom MacArthur voted in favor of this legislation, that he helped craft, because it'll make federal individual income and small business tax cuts permanent for all Americans as well as expanded provisions to soften the burden of child care costs and medical expenses.
"On average, New Jersey taxpayers will see a federal tax cut of nearly $1,500.00 in 2018, more than half of our state's taxpayers will see a reduction of $2,740.00," MacArthur said.
He says this bill serves as a benefit to both taxpayers and businesses.
"The more money that we have left in corporations and small businesses, the more money people have invested in their communities and in their own lives," MacArthur said. "People don't put money under a mattress, they put it to work."
He says with an economy that has "boomed this year" this legislation will also pay dividends.
"Except for one-month 18-years ago unemployment is at a 50-year low, consumer confidence is higher than it's been in years, small business confidence is the highest ever recorded and our growth is finally over 4-percent," MacArthur said.
The federal cuts now being permanent, MacArthur explains, should provide some solace to taxpayers.
"The vast majority of seniors (for example) take the standard deduction, they don't itemize and we doubled that standard deduction and voted to make it permanent," MacArthur said. "We also doubled the tax credit for families with children. There are 81-percent of New Jersey residents who are getting a tax cut and another 10-percent haven't gotten a change at all. It's only the people at the top that are paying a little bit more."
This particular bill will only affect your federal tax income, it doesn't raise or lower your state taxes.
MacArthur says making these federal tax cuts permanent is a benefit for taxpayers and he challenges New Jersey lawmakers to do the same here.
"Making it permanent will help the economy continue to grow, it'll help our seniors and families with young children," MacArthur said. "I would just say New Jersey ought to try it sometime...cut taxes and see what happens."
MacArthur encourages Governor Phil Murphy and state lawmakers to cut tax burdens to help New Jersey thrive economically.
"The tax cuts that I have supported are good for New Jersey and for my constituents but make no mistake they're better for other states with lower taxes," MacArthur said. "This state can't seem to live on a budget and rein in its spending. If they cut taxes, they'll see the same kind of growth and economic boom that we're seeing elsewhere."
MacArthur says New Jersey is experiencing some economic growth of its own, but not as much as the rest of the country, "and it's because of these misplaced policies in the state of tax, tax, tax, as if our people have a never-ending supply of money to send to Trenton."
Here is how Congressman MacArthur says taxpayers in New Jersey's Third Congressional District benefit from "Tax Reform 2.0":
- A majority of New Jerseyans, more than 80%, are seeing an increase in tax-home pay due to the federal tax cuts.
- More than half of NJ-03 constituents take the standard deduction, which this law permanently doubles to $12,000 for individuals and $24,000 for families.
- 48,000 constituents claimed the child tax credit, which is permanently doubled to $2,000 per child.
- All NJ-03 taxpayers benefit from MacArthur's advocacy to include a deduction on their property and state income taxes in line with New Jersey state law, which is made permanent.
- NJ-03 families caring for an elderly parent or a child in college are provided with an extra $500 due to the continuation of the non-child dependent tax credit.
- South Jersey seniors and those with high medical costs will benefit from the medical expense deduction that is extended through 2020.
- Permanently cuts the small business tax rate to its lowest since World War II.
- Permanently cuts the federal income tax rate so New Jerseyans will continue to keep more money in their pockets.
"The result is going to be more growth, more prosperity for New Jersey families and more jobs," MacArthur said.
Here are some of the highlights of the legislation from the Tax Foundation:
- The Tax Cuts and Jobs Act of 2017 made several significant changes to the individual income tax, including reforms to itemized deductions and the alternative minimum tax, an expanded standard deduction and child tax credit, and lower marginal tax rates across brackets.
- These changes simplify the individual income tax for millions of households, as 28.5 million filers would be better off taking the newly expanded standard deduction, instead of itemizing various deductions, reducing compliance costs.
- The Internal Revenue Service estimates the average time to complete an individual tax return will decrease by 4 to 7 percent. Converting this to dollar terms, "we estimate compliance savings could range from $3.1 billion to $5.4 billion".
- Under the new tax law, new limits apply to some itemized deductions, including deductions for state and local taxes paid and mortgage interest, which broadens the tax base and reduces distortions in the tax code.
- The individual income tax changes are scheduled to expire after December 31, 2025. If permanent, the income tax provisions would reduce federal revenue by $165 billion per year on a conventional basis, but when incorporating economic growth and feedback, on a dynamic basis, they would reduce federal revenue by $115 billion a year.