Tax Reform Means Your Paycheck Will Grow
By Paul Ryan | Dec. 19, 2017 7:02 p.m. ET
The Tax Cuts and Jobs Act, which the House passed Tuesday, represents the biggest advancement for growth and opportunity in recent memory. It provides real relief to middle-income families and realizes policy goals conservatives have sought for decades.
The centerpiece of the bill is the most sweeping pro-growth reform of our tax code since the Reagan era—perhaps ever. Once President Trump signs it into law it will deliver more jobs, fairer taxes and bigger paychecks for Americans from all walks of life.
This is about helping a middle class that has been squeezed by a tax code that is expensive, complicated and skewed toward special interests. Nearly 8 in 10 Americans live paycheck-to-paycheck; nearly half say a $500 surprise bill or emergency would put them in debt.
Taxpayers will get significant relief soon. A family of four earning the median income of $73,000 can expect a $2,059 tax cut. The Internal Revenue Service has announced that it will adjust its withholding tables as soon as February. With less money withheld, paychecks will be bigger in a matter of weeks.
The bill significantly increases the standard deduction, nearly doubling the amount you can earn completely tax-free. It also makes taxes simpler, so that nearly 9 in 10 Americans will be able to file their taxes on a form the size of a postcard.
Middle-income families will benefit from the doubling of the child tax credit to $2,000 a child. The expansion of 529 college-savings plans to elementary and secondary education means more Americans will be able to invest in their children’s futures.
This bill will also create jobs and drive up wages. It cuts the highest corporate tax rate in the industrialized world from 35% down to 21%, below the developed-nation average. This will make American companies more competitive. By driving economic competitiveness, lowering the cost of capital, and moving to a territorial system like most other countries, America will once again become the best place in the world to invest and build a business. Jobs and capital will return from overseas, leading to more demand for labor, higher wages and bigger paychecks.
Relief is also coming for the small businesses that are at the heart of the economy. A new provision will enable job creators on Main Street to deduct 20% of their income. Small businesses will also be able to write off immediately the full cost of new equipment, giving them an incentive to expand and hire more workers.
The bottom line is that this bill will help you earn more and keep more of what you earn. But that is not all. The Tax Cuts and Jobs Act achieves a historic trifecta of conservative policy goals. In addition to tax reform, the bill eliminates the ObamaCare individual mandate penalty, the linchpin of the health-care law, which forces people either to buy insurance or pay a tax. And for the first time, we will open up the Arctic National Wildlife Refuge for energy exploration and development, so we can harness these natural resources.
After years of stagnation and division, we are firmly and finally choosing the path of growth. These ideas will pave the way for an economic renaissance, as Americans once again feel confident in their future, and the country’s too. Economic growth will not solve all our problems, but it will make our problems much easier to solve.
Moments like this come along once in a generation. This is conservative reform at its best: applying our founding principles of liberty, limited government and free markets to the most pressing challenge of the day. We are delivering relief to those who have struggled for too long under an antiquated system. And we are keeping our promise to the American people by giving them the tax cut—and tax code—they need and deserve.
Mr. Ryan is speaker of the House.
Appeared in the December 20, 2017, print edition of the Wall Street Journal.