West OC Times

WASHINGTON, D.C. - On May 12, Rep. Michelle Steel (R-CA) introduced the “Permanent Tax Cuts for American Families Act” with eight of her colleagues to make permanent the enhanced standard deduction established by the Tax Cuts and Job Act of 2017 (TCJA), which is set to expire in 2025.

The TCJA nearly doubled the standard deduction, raising the return from $6,500 to $12,000 for individual filers, and from $13,000 to $24,000 for joint filers. By making the standard deduction larger, more Americans can avoid the hassle of itemizing.

For tax year 2023, the standard deduction for married couples filing jointly will be raised to $27,700 for joint filers and $13,850 for individual filers.  It is more advantageous and time saving for many filers to take the standard deduction than to itemize their deductions.

“The enhanced standard deduction allows nearly 29 million more households to streamline their tax filing process and increase their tax-free income earnings,” said Steel. “I have always been a tax fighter and we need tax policies that will help hard working Americans. I am excited to work my colleagues to take up commonsense legislation to protect every American from excessive taxation that will allow them to keep more of their hard-earned income. I am eager to work on enhancing and making permanent many of the tax saving and pro-growth policies created by the TCJA.”

“One of the most beneficial provisions for hardworking families in the Tax Cuts and Jobs Act was doubling the standard deduction,” said Smith. “Thanks to this increase, more than 90 percent of filers don’t need to itemize, which is why we must act to make the enhanced standard deduction permanent. There is no better member of the Ways and Means Committee to lead this important bill, and I thank Representative Steel for her commitment to a fairer, simpler tax code for families everywhere.”

“The Tax Cuts and Jobs Act was revolutionary for the American taxpayer. As a member of the Ways and Means committee, it is my responsibility to make sure American families are able to save more and give the government less of their hard-earned money. The Permanent Tax Cuts for American Families Act will cement important tax cuts into law, ensuring stability for families across West Virginia,” said Miller.

“Thanks to the Tax Cuts and Jobs Act of 2017, American workers and families have kept more of their hard-earned money through a simpler, more efficient tax code,” said Feenstra. “I’m proud to work with my Ways and Means colleague, Rep. Michelle Steel, to ensure that our families continue to benefit from the enhanced standard deduction — permanently. As a strong advocate for tax reform and fiscal responsibility, this legislation will ease the pain of inflation on our communities while growing our economy — two priorities that I am proud to support.”

“The tax cuts established in the TCJA allowed taxpayers to keep more of their hard-earned money and ushered in one of the strongest economies in U.S. history,” said Kustoff. “However, some of its important provisions are set to expire. By making the TCJA’s Standard Deduction permanent, this legislation will protect millions of working-class families from burdensome tax hikes.”

"Especially during this time of painful and intractable inflation caused by the Biden Administration, it is imperative that Congress focuses on relief for our hard working families, many of whom are living paycheck to paycheck," said Van Duyne. "Making permanent the enhanced standard deduction is a responsible, family focused policy to ensure millions of Americans are keeping their hard earned dollars instead of handing them over to a wasteful and bloated federal government."

Background

Rep. Steel was joined in introducing the “Permanent Tax Cuts for American Families Act” by Reps. Adrian Smith (R-NE), David Kustoff (R-TN), Beth Van Duyne (R-TX) Brad Wenstrup (R-OH) Drew Ferguson (R-GA), Mike Kelly (R-PA), Randy Feenstra (R-IA), and Carol Miller (R-WV).

The Joint Committee on Taxation estimated that that nearly 30 million households found it more advantageous to take the standard deduction.  Now 88% of filers will use the standard deduction to complete their taxes.

91% of filers (approximately 130 million filers) used the standard deduction to complete their taxes in 2021.

In addition, these changes are concentrated among low- and middle-income groups. The number of returns itemizing deductions fell by 75% for those with income between $20,000 and $30,000 and 74% for those with income between $30,000 and $40,000.

 

Read the full text of the legislation here.

Economy and Jobs

Original source can be found here.