WASHINGTON – Pending tax reform legislation would mean an average tax cut of $1,600 for local resident, according to Rep. Tom Reed (R), a member of the House Ways and Means Committee.
Reed praised the plan, saying the cut would mean opportunities for area residents to use the savings in needed ways.
“When people get to keep more of their hard earned dollars, it means money for things that make a difference for hardworking people. It’s a down payment on a car for a factory worker in Hornell, daycare for a young family in Elmira, or a trip to Disney World for a family in Dunkirk. Seniors can now visit their grandkids who were forced out of New York because the taxes were ‘too damn high.’ This is important to folks throughout the Southern Tier, Finger Lakes, and Western New York. That’s who I’m working for and whose voice I will continue to carry to Washington,” Reed said.
The bill lowers rates on middle and working class Americans by condensing the number of tax brackets while keeping the top income tax rate at 39.6 percent. The legislation also doubles the standard deduction.
By retaining the state and local property tax deduction, this bill protects 99.7 percent of homeowners in the 23rd District, Reed said.
“I stand with and will protect the hardworking taxpayers of our region. I have heard the voices from Jamestown to Oswego to Geneva, and the message is clear: people deserve a tax cut, and this legislation will deliver just that,” Reed said.
The proposal sets individual tax rates at zero percent, 12 percent, 25 percent, 35 percent and 39.6 percent for the wealthiest Americans. In addition, the plan almost doubles standard deductions, raising the individual deduction from $6,350 to $12,000 and the married couples deduction from $12,700 to $24,000.
A new Family Credit would be established which would expand the Child Tax Credit from $1,000 to $1,600 and an extra $300 per parent and non-child dependent. In addition, the plan preserves the Earned Income Tax Credit, continues the deduction for charitable contributions so people can continue to donate and preserves the home mortgage interest deduction for existing mortgages. It also maintains the home
mortgage interest deduction for newly purchased homes up to $500,000.
The plan would also kill the so-called Death Tax, eliminating it in six years and doubling the exemption in the mean time.
Corporate tax rates would drop from 35 percent to 20 percent and prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.