Stopping the largest tax increase in U.S. history
This summer, Republicans passed, and President Donald Trump signed into law, legislation that prevented the largest tax increase on American families, farmers, workers, and small businesses in history.
Had the first Trump tax cuts been allowed to expire at the end of this year, the average Iowa taxpayer would have seen a 25 percent tax hike while a family of four would have been forced to fork over an extra $1,400 — the equivalent of about eight weeks of groceries — to the federal government.
As the only member of Congress serving on both the House Ways and Means Committee and the House Agriculture Committee, I played a central role in making these tax cuts permanent while expanding tax relief for workers, seniors, and manufacturers. Allowing every taxpayer and family in Iowa to face a significant tax increase was not an option for me.
Our package of tax cuts for working families made several important reforms to our tax code with the important goal of growing our economy and investing in our communities.
Policies like making the doubled standard deduction permanent at nearly $32,000 for married couples, expanding the child tax credit to $2,200 and making it permanent, and making car-loan interest on American-made cars tax-free up to $10,000 ensure that our families — the foundation of our communities — can invest in their futures, care for their kids, put money away for a rainy day, and thrive.
By letting Iowans keep more of their paycheck, our main street businesses and local economies prosper as a result.
We also codified tax relief and pro-growth provisions that benefit our small businesses, farmers, and manufacturers.
Just like with individual and family tax rates, the expiration of tax policies for businesses, manufacturing, and agriculture would have been economically catastrophic.
In Iowa alone, almost 270,000 small businesses would have seen a top tax rate of 43.4 percent and family farms would have had to pay a much higher death tax, both of which would have closed family-owned-and-operated businesses and farms for good.
Fortunately, with the passage of the Working Families Tax Cuts, we included my bill to increase the death tax exemption to $15 million, which protected two million family farms nationwide, and we made permanent the 20 percent deduction on qualified business income for small businesses and manufacturers so that they could make greater investments in their employees and their operations.
Moreover, we invested in domestic manufacturing and job creation by making a new category of immediate expensing for the construction of U.S.-based manufacturing plants and agricultural facilities.
This amendment to the tax code will grow our economy tremendously and encourage more businesses to build and expand in Iowa and across the nation.
Additionally, we not only stopped the largest tax increase in history but also delivered enormous tax relief for workers and seniors.
We eliminated taxes on tips and overtime, ensuring that those who put in the extra effort to provide for their families benefit from that effort tax-free.
We should honor our police and firefighters for putting their lives on the line around the clock and reward waiters, barbers, and many others in the service industry for going above and beyond by letting them keep more of the money they earn.
For our seniors, we included a new $6,000 deduction on their federal taxes, virtually ending tax on Social Security benefits. After a lifetime of hard work and sacrifice, the government should not take as much money as possible from our seniors, many of whom live on a fixed income. Instead, through this historic tax relief, we made clear that our seniors deserve to keep the money that they have already contributed to Social Security during their working years.
Delivering tax relief for families and workers, helping small businesses invest in their employees, and encouraging manufacturers to expand their presence in our country and our communities are all important avenues by which we can grow our economy and secure a prosperous future for our nation.
While Democrats threw their hands in the air and refused to join our effort to support families, farmers, and small businesses, Republicans stopped the largest tax increase in U.S. history and delivered additional tax relief to workers and seniors.
Through the pro-growth provisions of the Working Families Tax Cuts, our economy will ignite and taxpayers and families will benefit tremendously.