We’re on the cusp of something historic. This week, Congress will vote to send a pro-growth, pro-family tax cut package to the president’s desk for his signature. This bill will cut taxes by nearly $1.5 trillion across the entire economy, resulting in a tax cut for the average family of more than $2,000. It’s the largest tax cut in American history and will make our economy competitive again, keeping American jobs here at home instead of sending them overseas.
In case you’ve heard in the media that this bill won’t help you, let’s walk through how this bill will actually cut taxes for an Oklahoma family of four making $65,000 per year. Today, under current law, this family who takes the standard deduction and claims the existing child tax credit of $1,000 per child would have a tax liability of $2,462.
Under the new tax cut, this family would be able to take a standard deduction that has doubled to $24,000, reducing their adjusted gross income down to $41,000. To put families first, we also doubled the child tax credit to $2,000 per child and made it refundable up to $1,400 per child. With these deductions taken into account, this family will pay $539 in federal income tax — an overall tax cut of $1,923 compared to current law.
The bill does even more for families by maintaining crucial existing deductions. The mortgage interest deduction, a deduction for certain state and local property and income taxes and deductions for student loan interest, charitable giving and catastrophic medical expenses are all preserved under the new bill.
The benefits of tax reform will not just help the family in this example. The independent, non-partisan Tax Foundation found that under the tax reform proposal, Oklahoma will add 10,000 full time jobs to the work force, and the typical family in our state will see their taxes cut by around $2,000: these are tangible benefits that will help families invest in and save for the future.
Our historic tax reform also opens up opportunities for businesses to invest in the local economy by protecting the oil and gas industry and many of our family-owned businesses. This will allow Oklahoma’s companies to continue investing and creating new jobs.
Jim Inhofe, a Republican, is the senior U.S. senator from Oklahoma.