Rushmore State News

U.S. Senate Majority Leader John Thune (R-S.D.) addressed the Senate regarding upcoming tax legislation that aims to prevent tax increases for American families. Thune stated that if Congress does not act, a typical family could face a $1,700 tax hike next year, while families in South Dakota might see an increase of $2,500.

Thune explained that Republicans intend to prevent these hikes by considering a reconciliation bill later in the week. The proposed legislation would extend and make permanent provisions from the 2017 Tax Cuts and Jobs Act. According to Thune, “We’re making them permanent. And in some cases, we’re even improving on them.”

He highlighted several key elements of the bill: “Our 2017 tax relief legislation lowered tax rates for every income group. It doubled the child tax credit. It nearly doubled the standard deduction. The bill we’re voting on this week will make all of that permanent. And it will go even further when it comes to the child tax credit, increasing it to $2,200 per child and linking it to inflation – again, permanently.”

Additional measures include suspending taxes on tips and overtime pay for millions of workers such as police officers, firefighters, and nurses. There is also an increased standard deduction for seniors.

Thune noted that business owners would benefit from lower rates and policies designed to encourage investment: “We lowered tax rates for owners of small and medium-sized businesses, farms, and ranches. We made it easier for them to recover the cost of investing in their businesses – which in turn freed up cash for them to invest in their operations and their workers.”

He cited positive economic outcomes following the original 2017 law: “In the wake of the Tax Cuts and Jobs Act, our economy grew at a substantially better rate than projected. Real wages increased. Unemployment fell to a 50-year low. The poverty rate fell to the lowest level ever recorded.”

The new proposal seeks further changes such as full expensing for new factories and factory improvements and raising the death tax threshold to $15 million with inflation adjustments.

Thune referenced analysis from the Council of Economic Advisers about potential impacts: “It contains a lot of good news, starting with as much as 4.9 percent higher GDP in the next few years. That means more jobs. It means bigger paychecks – as much as [$10,900] per year for a typical family... In fact, the same forecasters that got the effects of the Tax Cuts and Jobs Act right are estimating as much as $6 trillion in deficit reduction stemming from the bill’s pro-growth policies.”

The Senate is expected to vote on this bill within the week.