Optimisim is growing for families and businesses
April was the last time we had to file our taxes under our old tax code. Next April 15, taxes will be lower and simpler to file.
People in Lawrence County and across the country will get the full benefits of the tax reform law Congress passed and President Trump signed earlier.
This means when you file your taxes in 2019, the standard deduction will be doubled—to $24,000 for a family, the child tax credit will be doubled—to $2,000 per child, and the lower individual tax rates will have been in place for a full year. Ninety percent of Americans are already seeing this in their paychecks because their employer has been directed to reduce their tax withholding thanks to the tax cuts.
As a result of all of these changes, more than three million Americans who previously had federal income tax liability will be taken off the income tax rolls altogether. An Ohio family of four at the median income level will save about $2,000 a year on their taxes from this new law.
That extra $2,000 a year makes a big difference for families in Ironton—and across the state. People have told me that they are using their tax reform savings to put some extra money away for retirement, for a long-awaited family vacation, for health care expenses, and so much more.
Regardless of how Ohioans decide to use their savings from tax reform, the important thing is that the choice is theirs now that more money is staying in their pockets rather than going to Washington.
Tax reform is allowing Ohioans to spend more of their money how they see fit, and it is helping Ohio business—and they are investing in their workers and in their operations.
Since the first of the year, I’ve visited 16 businesses across the state—all have reinvested in their employees or their operations as a direct result of tax reform—and some have done both. This includes small businesses in Cincinnati, Lima, Columbus, Cleveland, Dayton, Toledo, Zanesville and more that have announced increased investments in equipment and technology, pay increases, bonuses, additional retirement match contributions, or new education benefits specifically because of this new tax law. Two of these businesses have told me that they are using the tax cut savings to give their workers health care coverage.
I have also held a half dozen roundtable discussions or town hall meetings with Ohio small-business owners and economic development leaders to discuss how tax reform is affecting their communities.
A report from the nonpartisan Congressional Budget Office estimates that 1.1 million American jobs will be created in the next 10 years. This is largely because of these tax changes.
It lowered our business tax rate to be more competitive with the rest of the world, created a 20 percent deduction for smaller ‘pass-through’ companies, updated our international tax code to encourage jobs and investments in this country rather than overseas, and implemented pro-growth policies like immediate expensing of equipment. The result is that we are once again making America the best place in the world to do business.
A recent PNC survey of Ohio businesses showed small and mid-size business optimism at the highest level since the survey started nine years ago. Much of that optimism is from our new tax code.
The benefits of tax reform can also be seen directly in Ohio communities. The tax reform law preserves federal tax credits that help leverage private funds for historical renovation and community redevelopment projects.
These tax incentives, the Historic Tax Credit and New Market Tax Credit, were removed in the House-passed tax reform bill. I know how important these incentives are for our communities, so I worked with my colleagues to ensure they were included in the Senate-passed tax reform bill and in the final law.
In Ironton, the Marting Hotel was transitioned into the Park Avenue Apartments with the help of federal Historic Tax Credits, and the Roosevelt Apartments were renovated thanks in part to this tax credit as well. There are countless other examples of these projects benefiting communities across our state, and their importance to economic development in Ohio is why I made sure they stayed in the final law.
People in Lawrence County have a lot to be optimistic about with a new tax code that lets them save a little more of their hard-earned money. I’m encouraged about the good news we’ve already seen as a result of this law, and I believe this is only the beginning.
Rob Portman is the junior U.S. senator representing Ohio. His office can be reached at 202-224-3353.