ST. GEORGE – Sen. Orrin Hatch, R-Utah, rolled out a plan to reform the nation’s tax code Thursday that he says will save middle-class families up to $1,500 annually. An independent analysis of the plan also claims it will grow the economy and create nearly one million jobs.
“The Tax Cuts and Jobs Act will bring our outdated tax code into the 21st century and provide much-needed tax relief for hardworking American families and small businesses,” Hatch said in a short video posted Thursday on YouTube.
“Our tax reform package will unleash the American economy,” he said, “leading to more jobs, higher wages and greater investment here at home.”
Hatch, chairman of the Senate Finance Committee, said passing tax reform is more important than ever and that the cost of doing nothing would be too much for the American people to bear.
On the Senate floor speaking on the Senate GOP’s tax-reform plan, Hatch noted the last time there had been a major overhaul of the tax code was 1986. The code needed to be reformed due to being outdated, and the same is true today, he said, adding the tax code has not kept up with the advances of the last 30 years.
According an analysis of the tax overhaul plan released Friday by the Tax Foundation, an independent tax policy nonprofit group, it would grow the economy by 3.7 percent, increase wages by 2.9 percent and create nearly 1 million new jobs.
The analysis also predicted the tax overhaul would provide more than $1.2 billion in new revenue for the federal government from “positive economic effect.”
While extolling the benefits the Senate tax plan could have for the middle class, Hatch also said all parties should come together and support tax relief for the American people.
For a middle class family of four, that tax relief is estimated to be around $1,500 a year, according to Hatch’s office.
The plan also involves lowering individual tax rates for low- and middle-income Americans by expanding the zero tax bracket and maintaining a 10 percent bracket, allowing taxpayers to keep more money and save for retirement.
The bill also includes a reformed rate structure that targets tax relief to the middle class while maintaining the existing tax distribution, and a 38.5 percent bracket for high-income earners.
The child tax credit also goes from from $1,000 to $1,650 under the proposed plan.
“We have an historic opportunity to help, and that opportunity should not be squashed by anyone on either side of the aisle for cheap political points,” the senator said.
As likely expected, facets of the plan have drawn objections from both Democrats and other Republicans.
The bill puts a one-year delay on lowering the corporate tax rate from 35 percent to 20 percent.
Delaying that reduction would lower the cost of the bill to the Treasury, but the delay is opposed by the White House and some Senate Republicans.
“The president would like this to go into effect right away,” Treasury Secretary Steven Mnuchin said Thursday on Fox Business Network.
Other obstacles remain, among them a band of deficit hawks in the Senate who are unhappy about the $1.5 trillion the legislation would add to the national debt over the coming decade.
“I remain concerned over how the current tax reform proposals will grow the already staggering national debt by opting for short-term fixes while ignoring long-term problems,” Sen. Jeff Flake, R-Arizona, said. “We must achieve real tax reform crafted in a fiscally responsible manner.”
Democrats are strongly opposed to the GOP rewrite, so the Republicans must find agreement among themselves to have any hope of passage.
Other aspects of the Tax Cuts and Jobs Act proposes to do, according to Hatch’s office, include nearly doubling the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. For single parents, the standard deduction will increase from $9,300 to $18,000.
In an effort to help families, it contains the following proposals:
- In addition to expanding the child tax credit from $1,000 to $1,650, it would allow many more parents to claim the credit by substantially lifting caps.
- Preserve the child and dependent care tax credit to help working parents care for their children and older dependents — such as an aging grandparent — who need support;
- Preserve the adoption tax credit to help families with the high costs of adopting children; and
- Allow parents to more effectively save for the education costs of unborn children.
The act would also preserve the deduction for charitable contributions; protect the home mortgage interest deduction for existing mortgages and maintain the deduction for newly purchased homes up to $1 million; and continue popular retirement savings programs, such as 401(k)s and Individual Retirement Accounts.
Associated Press reporters ANDREW TAYLOR and MARCY GORDON contributed to this story.
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