After years of talk, research, and debate, Congress passed tax reform legislation that the president recently signed into law. I’m proud of the bill because I know it will make a real difference for the people of Ohio.
The Tax Cuts and Jobs Act will provide tax relief for middle-class families and tax reform for American workers and businesses so they can be more competitive in the global market.
It will help Ohioans by doubling the standard deduction to $24,000 per family, doubling the child tax credit to $2,000 per child, and lowering tax rates across middle class income levels.
While our economy has seen some improvements recently, many hardworking Ohioans I represent are still not feeling the benefits. For a couple of decades, expenses have gone up — health care being the biggest expense of all — and wages have been flat. That’s the middle class squeeze. The tax cuts in this plan, and the increased jobs and wages that will result from it, will give families the relief they deserve.
A typical family of four at the median income level will save more than $2,000 a year on their taxes as a result of this plan. That extra money can be used to help pay for health care, buy gas or groceries, or save for retirement.
In total, we are told that the tax cuts in this plan will take approximately three million people who have federal income liability now off the tax rolls altogether.
Workers will also benefit through more jobs and higher wages as a result of the business tax reforms in this plan. Already, a number of companies, including Fifth Third Bank in Ohio, have announced they will increase pay or investments, or both, because of this tax reform.
The U.S. has the highest corporate tax rate in the industrialized world. By lowering that rate to be more competitive, companies will be encouraged to expand jobs and investments in this country rather than going overseas.
The status quo is not working. Because of our broken international tax code, American workers and businesses have been forced to compete with one hand tied behind their backs. Last year, there were three times as many American companies taken over by foreign companies than foreign companies taken over by American companies. And there is currently between $2.5 trillion to $3 trillion of U.S. company earnings trapped overseas because of our outdated international tax code. We want that money invested in America. The tax reforms in this plan encourage jobs and investments to return to the U.S. rather than going overseas.
As a member of the tax-writing committee and the House-Senate tax conference that negotiated the final bill, I worked throughout this process to develop and improve the bill on behalf of Ohioans.
I advocated for, and successfully protected, a number of incentives for urban redevelopment. We preserved the 20 percent Historic Tax Credit, which has been instrumental in raising private funds to restore historic landmarks in Central Ohio.
We also protected the New Markets Tax Credit and Private Activity Bonds. In Ohio, these tax incentives have leveraged more private sector investments for economic development and affordable housing. They have also spurred economic growth and job creation and have ultimately generated increased tax revenue.
I worked tirelessly as we developed this bill. I think the final result we have is a good tax reform bill that will achieve things Republicans and Democrats alike have long supported: tax cuts for the middle class and a more competitive tax code for American workers and businesses.
This is an investment into American families, American workers, and American businesses. Ohioans will be better off because of these overdue changes to the broken tax code.
Rob Portman is a Republican U.S. Senator from Ohio.