Here’s Graves’ Super-Detailed Breakdown Of What’s In The Tax Reform Bill

If you want to know what’s going on with respect to the federal government, there are few better sources to consult than the office of Rep. Garret Graves (R-Baton Rouge), whose explanations of both legislation and the inner workings of federal agencies are often the most thorough around.

That’s certainly the case today, as Graves’ staff put out a press release with an enormous amount of detail outlining what the just-passed tax reform bill offers to the American people, with a special emphasis on what it does for the people of Louisiana. We thought we’d pass along the entire thing…

Congressman Garret Graves (R- South Louisiana) released the following statement after voting today in the US House of Representatives to pass the Conference Report to Accompany H.R. 1, the Tax Cuts and Jobs Act – a bill that reforms the nation’s tax code for the first time in 31 years:

“This is a game-changing rewrite of our tax system that finally puts what’s best for people – not government – first.  Lowering taxes across every income tax bracket, nearly doubling the standard deduction, giving people back their freedom to make healthcare decisions without having to pay a government-imposed penalty and lifting some of the tax burden on our small businesses means that Washington takes less while individuals, families and job creators keep more. That’s a good thing. Finally, this tax reform bill helps to eliminate the strategic advantage that foreign companies hold over America’s small businesses by providing competitive tax rates.  This provides opportunities for all Americans by creating jobs here in our country not overseas and helps to increase pay for our families.   

And Louisiana wins: our flood and other disaster victims get the tax breaks we’ve fought for all year long, we preserved tax incentives uniquely critical for community development, historic preservation, economic reinvestment and higher education, and the bill includes a change that may result in a small increase in coastal restoration and hurricane protection funding for Louisiana by amending offshore energy revenue sharing law.” 

Flood Tax Relief: Individuals affected by the 2016 flooding in Louisiana will now have much needed tax relief with the passage of this bill. The conference report contains two provisions adopted in the Senate passed version, which will remove the 10% penalty many incurred when withdrawing from their retirement plans in the wake of this disaster. The other provision provides that casualty losses are deductible without exceeding ten percent of the taxpayer’s adjusted gross income. The conference report embodies the legislation first proposed by Reps. Charles Boustany and Graves in the wake of the Louisiana 2016 floods. H.R. 2849, the “Louisiana Flood and Storm Devastation Tax Relief Act of 2017” was introduced June 8, 2017, and cosponsored by Reps. Cedric Richmond, Ralph Abraham and Clay Higgins.

Increased Revenue for Coastal Restoration: The march to restore our coast continues. The conference report includes a provision that expands upon the Gulf of Mexico Energy Security Act that Graves helped to write and negotiate in 2006. H.R. 1 may result in an additional $70 million to $80 million to Louisiana’s restoration efforts. Combined with the law changes Graves made (HR 3462, which was included in the FAST Act) to the Coastal Wetlands Planning, Protection and Restoration Act (CWPPRA) in 2015, which adds $80 million to $100 million a year in coastal protection efforts, the delegation’s efforts to ramp up coastal protection spending has expanded dramatically.

Grad School Tax Credit: Currently, employees, as well as their spouse or any dependents, of higher education institutions are able to exclude tuition reductions from gross income. The conference report preserves this protection. Graves stated last month when passing the House version of H.R. 1 that he would work to fix the unintended impact of H.R. 1 on the Grad School Tax Credit.

Historic Tax Credit:  Louisiana’s unique cultural and architectural heritage means our state has consistently been at the top of the list of states that utilize the rehabilitation credit. Graves worked with House leaders to urge protection of the credit in the Senate version of the bill, which does modify the credit but retains a 20-percent credit for qualifying rehabilitation expenditures. The preservation of this credit helps to protect many historic buildings and economic revitalization projects in our state.

New Markets Tax Credit: Louisiana has also utilized the New Markets Tax Credit to bring development, job creation and economic growth to areas of our community in need. Graves vocalized support for continuing access to the credit, based on the return of investment on federal tax dollars. As a result, the House and Senate Conference Committee Report maintains intact current availability to this credit, enabling necessary investments to continue to be made in our community. Graves will continue to work with the Ways and Means Committee to help improve this program’s guidelines to ensure only meritorious projects that advance the public’s best interest are advanced.

Graves continued: “We are operating under a 31-year old tax code.  It is outdated, broken and punishes hardworking Americans.  As other countries have modernized their tax codes to reflect today’s economy, we continue to challenge future growth and put the future of our children and grandchildren in jeopardy.

When you look at this bill collectively, we’re talking about a fundamentally different environment for our country – one that allows for higher wages, lets people keep more of their hard-earned money, encourages broad economic growth, supports the kind of investments needed to own a home, have or adopt children and to build safer communities with stronger families and more opportunity for everyone.”

Under the bill that now awaits Senate approval before being sent to the president, a family of four with income of around $73,000 (median family income) will see a tax cut of more than $2,000. Their tax bill will fall from what they would pay next year, around $3,557.50, to paying $1,499 instead—a reduction of $2,059. This represents a reduction in their tax bill of nearly 58 percent.*

A single parent with one child earning $41,000 will see a tax cut of more than $1,300. Their tax bill will fall from what they would pay next year, around $1,792.50, to paying $488 instead—a reduction of $1,304.50. This represents a reduction in their tax bill of nearly 73 percent, meaning that their tax bill next year will be about one quarter of what it would be under current law.*

Married small business owners with income of $100,000 per year: a couple earning $100,000, with $60,000 from wages, $25,000 in compensation from their noncorporate business, and $15,000 of business income, will see a tax cut of more than $2,600. Their tax bill will fall from what they would pay next year, around $10,982.50, to paying around $8,379 instead—a reduction of $2,603.50. This represents a reduction in their tax bill of nearly 24 percent.*

Highlights of the Tax Cuts and Jobs Act:

  • Lowers individual taxes and sets the rates at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37% so people can keep more of their hard-earned money.
  • Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,500 and $13,000 under current law   to $12,000 and $24,000 for individuals and married couples, respectively.
  • Continues to allow people to write off the cost of state and local taxes – up to $10,000. Gives individuals and families the ability to deduct property taxes and income – or sales – taxes to best fit their unique circumstances.

Takes action to support more American families by:

  • Expanding the Child Tax Credit from $1,000 to $2,000 for single filers and married couples to help parents with the cost of raising children. The tax credit is fully refundable up to $1,400 and begins to phase-out for families making over $400,000. Parents must provide a child’s valid Social Security Number in order to receive this credit.  This will save honest Americans money by eliminating fraud and abuse of this credit.
  • Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
  • Preserving the Adoption Tax Credit so parents can continue to receive additional tax relief as they open their hearts and homes to an adopted child.
  • Preserves the mortgage interest deduction – providing tax relief to current and aspiring homeowners.
  • For all homeowners with existing mortgages that were taken out to buy a home, there will be no change to the current mortgage interest deduction.
  • For homeowners with new mortgages on a first or second home, the home mortgage interest deduction will be available up to $750,000.
  • Provides relief for Americans with expensive medical bills by expanding the medical expense deduction for 2017 and 2018 for medical expenses exceeding 7.5 percent of adjusted gross  income, and rising to 10 percent beginning in 2019.
  • Continues and expands the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.
  • Eliminates Obamacare’s individual mandate penalty tax – providing families with much-needed relief and flexibility to buy the health care that’s right for them if they choose.
  • Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
  • Improves savings vehicles for education by allowing families to use 529 accounts to save for elementary, secondary and higher education.
  • Provides support for graduate students by continuing to exempt the value of reduced tuition from taxes.
  • Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts (IRAs) so Americans can continue to save for their future.
  • Increases the exemption amount from the Alternative Minimum Tax (AMT) to reduce the complexity and tax burden for millions of Americans.
  • Provides immediate relief from the Death Tax by doubling the amount of the current exemption to reduce uncertainty and costs for many family-owned farms and businesses when they pass down their life’s work to the next generation.

For job creators of all sizes, the Tax Cuts and Jobs Act:

  • Lowers the corporate tax rate to 21% (beginning Jan. 1, 2018) – down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.

Delivers significant tax relief to Main Street job creators by:

  • Offering a first-ever 20% tax deduction that applies to the first $315,000 of joint income earned by all businesses organized as S corporations, partnerships, LLCs, and sole proprietorships. For Main Street job creators with income above this level, the bill generally provides a deduction for up to 20% on business profits – reducing their effective marginal tax rate to no more than 29.6%.
  • Establishing strong safeguards so that wage income does not receive the lower marginal effective tax rates on business income – helping to ensure that Main Street tax relief goes to the local job creators it was designed to help most.
  • Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing growth of jobs, productivity, and paychecks.
  • Protects the ability of small businesses to write off interest on loans, helping these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.

Preserves important elements of the existing business tax system, including:

  • Retaining the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.
  • Preserving the Research & Development Tax Credit that encourages our businesses and workers to develop cutting-edge “Made in America” products and services.
  • Retaining the tax-preferred status of private-activity bonds that are used to finance valuable infrastructure projects.
  • Eliminates the Corporate Alternative Minimum Tax, thereby lowering taxes and eliminating confusion and uncertainty so American job creators can focus on growing their business and hiring more workers, rather than on burdensome paperwork.
  • Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation for many of our nation’s job creators.
  • Makes it easier for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in our local communities.
  • Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.

For greater American energy security and economic growth, the Tax Cuts and Jobs Act:

  • Significantly boosts American energy production. Responsible development in the 1002 Area will raise tens of billions of dollars for deficit reduction in the decades to come, while creating thousands of new jobs, reducing our dependence on foreign oil, and helping to keep energy affordable for American families and businesses.
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