On Tax Day, Senator Ted Cruz (R-Texas) introduced S.2687, legislation to make the individual tax cuts from the Tax Cuts and Jobs Act permanent.
This bill would ensure that 90 percent of American wage earners continue to see tax reduction after 2025. All Senators should support this legislation.
Because of tax reform, a family of four earning the median income of $73,000 will receive a tax cut of more than $2,000 this year. Similarly, a single parent with one child earning $41,000 per year will see tax reduction of 73 percent, resulting in a $1,304 tax cut. Between 2018 and 2025, American families and individuals will see tax reduction totaling $1.17 trillion because of the Tax Cuts and Jobs Act.
Unfortunately, Senate procedure and the refusal of Democrats to support tax cuts meant that the individual provisions in the Tax Cuts and Jobs Act could not be made permanent. If Congress does nothing, these important tax cuts will sunset in 2026.
Senator Cruz’s legislation would make this tax reduction permanent including:
- The doubling of the standard deduction to $12,000 and $24,000 for a family. This provision is a $690 billion tax cut between 2018 and 2025. If allowed to sunset, the standard deduction would revert to $6,000 for individuals or $12,000 for a family.
- The reduction of nearly every individual income tax bracket, a tax cut of $1.2 trillion between 2018 and 2025.
- The doubling of the child tax credit to $2,000 Child Tax Credit. This is a $533 billion tax cut between 2018 and 2025. If allowed to sunset, the CTC would revert to $1,000 per child.
- A 20% deduction for pass-through businesses (LLCs, partnerships, S-corporations etc.). This is an 88 billion tax cut between 2018 and 2025.
- The doubling of the death tax exemption to $11 million. This is a $69 billion tax cut between 2018 and 2025. If allowed to sunset, the exemption would revert back to $5.49 million, meaning more taxpayers, including many family owned businesses, would be hit by the death tax.
- An increase in the threshold that the Alternative Minimum Tax hits individuals so that it kicks in at $1 million of annual income. This is a tax cut of $572 billion between 2018 and 2025. If this sunsets, millions of families will be hit by the AMT.
As noted by Senator Cruz, support for making this tax reduction permanent should be bipartisan. Even socialist Senator Bernie Sanders (I-VT) has voiced support for this idea:
“The weeks after the tax bill passed, Bernie Sanders was on one of the Sunday shows. Jake Tapper asked him, said, “Listen, virtually every middle class taxpayer in America is getting a tax cut as a result of this. Isn’t this a good thing?” Bernie said, “Yes, yes it’s a wonderful thing. But the problem is it isn’t permanent.
“Well I saw that and promptly tweeted out a reply.
“Oddly enough, I haven’t heard back from Bernie. It’s been crickets chirping.
“But we ought to follow through to make the individual tax cuts permanent. We ought to follow through to make expensing permanent.
“We ought to follow through to make the small business tax cuts permanent. We ought to keep moving forward and prioritizing jobs, jobs, jobs because that’s the priority of the American people.”