One of Cobb’s Congressional representatives says he believes a tax reform bill will be on President Donald Trump’s desk by the end of the year.
Though the current tax reform plan is expected to simplify the tax system, including reducing the amount of information many filers will have to submit, U.S. Rep. Barry Loudermilk, R-Cassville, said in a sit-down interview with the MDJ on Wednesday that the specifics of the bill remain in flux.
The tax reform package is also expected to simplify the tax system, including changing filing procedures to make way for personal tax filers to submit all of their information to the Internal Revenue Service on one postcard-sized piece of paper.
Loudermilk said with his expectation that the tax reform bill will be on Trump’s desk at year’s end, he believes the Republican-controlled House’s goal will be to have the bill out of their chamber by Thanksgiving to give the Senate time to deal with it. He also expects the plan to have some bipartisan support.
“I hope by Thanksgiving, we’ve got at least solvent language and it keyed up for a vote, if not something voted out of the House, but I think our objective is to have it done by the end of the year, because you want something definitely done before people start filing their taxes,” he said. “Our idea is next year, your 2017 taxes are filed on that postcard.”
Tax reform was also recently addressed by U.S. Rep. Karen Handel, R-Roswell, who spoke on a variety of topics in a talk to the Metro Marietta Kiwanis Club on Monday. Handel said that the tax package would benefit corporations by allowing “full and immediate expensing for capital expenditures.”
She also highlighted the plan’s proposal to lower the corporate tax rate from about 35 percent to 20 percent.
“The two main drivers of growth, you talk to just about any economist, they will tell you is lower (tax) rates and full expensing on those capital investments,” Handel said. “This tax reform bill is going to do that, and it is going to get this economy moving in a way that we have not seen certainly in probably two decades.”
Among the other core parts of the tax reform plan are a reduction in the number of tax brackets, from seven to three, and a doubling of the standard deduction, to $12,000 for individuals and $24,000 for families.
“That is a huge boost to young families,” Loudermilk said, but added that small businesses would likely see a benefit as well.
Raising the deductions, he says, would allow a family with one wage earner to earn a full-time pay rate of about $11.50 an hour without paying federal taxes.
Under current tax levels, he said, businesses, especially restaurants and others with entry-level jobs, have sometimes had a hard time keeping employees, as new employees that make $9 or $10 an hour may realize that remaining on government assistance could work out better in their favor.
“(Workers) come off government assistance and they’re making $9 an hour, well above minimum wage, but they’re being taxed on it, sometimes they’re having to pay for child care, and they’re having to pay for health insurance. All of sudden there’s a lot of money being taken out of their paycheck, and they’re honestly saying, ‘I was doing just as well or better going back on government assistance,’” he said. “The problem is it traps them into that.”
He says it is also expected to reduce the percentage of American taxpayers who itemize their deductions from about 30 percent to 5 percent.
“It’s going to simplify (filing taxes) for a lot of people,” he says.
Handel, who took office earlier this year after winning a special election, sounded a note of optimism about the tax reform bill.
“Unlike what happened in health care, with tax reform a team from the White House, Senate and House are working together to come up with a framework, and there’s been a great deal of communication about what the tax reform bill will look like and how we will get it done,” she said.
— Information from the Associated Press was used in this report.