Tax relief to put $2,232 in pocket of average Southern Illinois family
Tax Day was on April 17 this year. It was last day for Americans to file their 2017 federal tax returns under our old, outdated tax code. It was also cause for celebration.
Taxes and celebration usually don’t go in the same sentence. But this year is different. Thanks to our efforts in Congress, this is the last Tax Day under the old tax code that burdened many ordinary Americans and their families. Starting next year, Tax Day will reflect the historic tax cuts we passed late last year.
Since the vast majority of taxpayers are subject to federal tax withholding, residents of Southern Illinois and nearly all Americans have seen these tax cuts show up already this year in the form of bigger paychecks.
The savings are significant. A typical family of four in Illinois’12th Congressional District will see a tax cut of $2,232. Some Washington politicians may see that as “crumbs,” but it’s a big deal for working families in Southern Illinois.
This will offer local residents and all Americans significant tax relief, allowing them to keep more of their money to pay for life's expenses. Most Americans -- about four-fifths by one count -- live paycheck-to-paycheck, meaning this extra money will make a real difference. These savings can cover gas bills, rising childcare costs, or contributing to a college fund.
Over 500 American job creators, including some of the country’s biggest employers such as Walmart, The Home Depot, Lowe’s Home Improvement, and AT&T, have used part of their tax cut savings to deliver raises or bonuses to more than four million Americans, boosting paychecks even more. In fact, I was pleased to hear during my recent visit to the Walmart Supercenter in Sparta that 71% of their employees have received a bonus and 60% of employees have received a wage increase. All of this is due to the new tax reform law.
As a result of these tax cuts, more money stays here where it can be invested in local projects and spent at local small businesses. This money would have otherwise been mailed off to the IRS in Washington D.C. to be spent on federal projects that often don't directly help local residents and businesses.
Speaking of small businesses, they are among the biggest winners of the tax cuts, receiving a new 20 percent tax deduction. This is welcome relief from the old tax code that taxed their marginal earnings at 40 percent -- not including state and local taxes. Being able to protect 20 percent of revenues from taxes means businesses will have more money to expand, hire, and raise wages. It will put small businesses on a more equal playing field with their big business and international competitors.
Since small businesses are the engine of our economy, providing two-thirds of new jobs, the benefits of the tax cuts will extend beyond small businesses and to local communities themselves, many of which were passed over by the economic recovery. The nonpartisan Congressional Budget Office just announced that it expects economic growth to reach 3.3 percent this year -- 74 percent higher than under the last year of the Obama Administration.
Now the bad news: some Washington politicians have promised to repeal these long overdue tax cuts if they retake Congress this fall. House Minority Leader Nancy Pelosi has called to "replace and repeal" them. Senate Minority Leader Chuck Schumer has said he wants a "drastic overhaul." Translation: less money in your paychecks.
But for this Tax Day, let's celebrate more money in our pockets because of the tax cuts. Just keep in mind how fleeting these savings may be.