OPINION: Tax Cuts and Jobs Act is Real Relief for Families
The sprawling landscape of California’s Central Valley is home to some of the hardest workers in the nation; immigrants who came to America looking for a better life, farmers who have cultivated the land for generations, and parents who wished to raise their children in our small towns.
However, rural communities face difficult challenges. This is especially evident in the Central Valley where unemployment levels are double the national average and far too many families live paycheck to paycheck. In my own congressional district, unemployment rests at 10.2 percent, the median household income barely reaches $40,000, and a staggering 27.2 percent of my constituents live in poverty.
Our communities are resilient, but my constituents deserve relief. That’s why Congress has spent the last several months working to reform our tax system and we are closer than ever to delivering real tax relief to the American people. By creating a simpler and fairer tax code, we will create jobs, grow our economy, and increase the amount of money Central Valley workers take home.
The Tax Cuts and Jobs Act will simplify our tax code by creating five tax brackets instead of seven – making it easier and less time consuming for my constituents to file their taxes. In fact, nine out of 10 Americans will be able to file their taxes on a form the size of a postcard.
Eighty-three percent of households in California’s 21st Congressional District do not itemize their taxes and instead, claim the standard deduction. One of the most critical reforms included in the tax reform package is the increase of the standard deduction. Our plan will DOUBLE the standard deduction from $12,700 to $24,000, so Americans can keep more of their paycheck. That means that the first $24,000 a family makes will be tax-free.
With the growing cost of gas, groceries, and other every day household items, Central Valley families have learned how to stretch a dollar. The Tax Cuts and Jobs Act increases the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children.
The average home price in California’s 21st Congressional District is $168,000 and a mere 1 percent of new mortgages are over half a million dollars. The Tax Cuts and Jobs Act preserves the mortgage interest deduction for individuals who have already purchased a home and will not impact future mortgages totaling less than $500,000. Our plan also preserves the property tax provisions of the state and local tax (SALT) deduction, to allow Californians to write off the cost of state and local property taxes up to $10,000.
Altogether, under the Tax Cuts and Jobs Act, the typical American family will receive an annual tax cut of $1,182 and the average American will see a wage increase of $4,000. As we get closer to passing comprehensive tax reform, some critics are claiming tax reform would lead to across-the- board spending cuts. Let me be clear: this will not happen.
While there are numerous legislative methods Congress can utilize to protect the programs and resources Americans rely on every day, these claims fail to take into account the significant economic growth that will result from comprehensive reform.
Economists predict the Tax Cuts and Jobs Act will lead to more jobs, higher wages, and a better standard of living for all Americans. In fact, by reforming the way small businesses pay taxes and making American companies competitive globally, the Tax Cuts and Jobs Act is expected to create nearly 900,000 jobs throughout the United States, 111,108 of which will be in California alone. The Council of Economic Advisers predicts our tax plan will boost or Gross Domestic Product (GDP) by 3 to 5 percent, bringing more investment and desperately needed jobs to America.
As Congress begins to reconcile the differences between the Senate and House tax reform proposals, one thing remains clear: my constituents have struggled under our outdated tax system for far too long. Reforming our tax code to make it simpler and fairer will create jobs, grow our economy, and increase the amount of money Central Valley workers take home to their families.
Congressman David G. Valadao represents the 21st Congressional District, which includes Kings County and portions of Fresno, Tulare, and Kern counties.