Sen. John ThuneWASHINGTON —
Find me one person who enjoys paying taxes, and I’ll find 10 million other people who’d rather not. While few taxpayers, if any, are doing cartwheels over giving Uncle Sam part of their hard-earned paycheck, almost everyone recognizes that it’s important to pay a share of our nation’s tax burden. It’s what helps fund the military, pay for our nation’s roads and bridges, and support numerous federal programs on which many Americans depend.
Yes, taxes are necessary, but I strongly believe that the federal government shouldn’t spend one penny more than what’s required to meet our obligations. There’s a ton of waste, fraud, and abuse in federal spending, and correcting that problem has long been a mission of mine. We’ve made progress in certain areas, but there’s a long way to go toward fully restoring fiscal responsibility in Washington.
I think one of the best ways to force the government to spend taxpayers’ money more efficiently is by simply taking less of it in the first place. Fulfilling that goal – allowing people to keep more of their own money – is exactly why I helped write the Tax Cuts and Jobs Act, which became law in December 2017, and this year’s tax season is the first in which Americans will file their taxes under the new system.
This year, filers will notice several positive changes, all of which mean more money in the family budget. First, lower rates, which has resulted in 90 percent of middle-income Americans seeing a tax cut of their own. Ninety percent. Second, doubling the child tax credit, which, again, helps support middle-income Americans. And third, nearly doubling the standard deduction – a fancy way of saying the government will tax less of what you earn.
As with most tax seasons, many Americans are accustomed to receiving refunds this time of year. And they should, especially if they overpaid the government during the previous year. While a lot has been made recently about the fact that some tax refunds are slightly lower than they were last year at this time, people probably aren’t hearing why that could actually be a good thing, because at the end of the day, a tax refund doesn’t reflect a person’s tax burden.
Getting a tax refund essentially means you gave the government an interest-free loan during the year. It’s your money, and you only owe what you owe, so anything you pay above that, the government will graciously hold on your behalf (money it can use until they have to return it to you later). In a perfect world, though, no one would receive a tax refund because everyone would pay exactly what they need to during the year. So, thanks to tax reform, since rates are lower and the government took less of your money on the front end, a smaller refund means you made a smaller loan to Uncle Sam, not necessarily that you paid more in taxes.
In a post-tax reform world, job creation and wages are up. So is economic growth, personal income, and business investment. Importantly, unemployment is down. So far down that in 2018, for the first time ever, the number of job openings outnumbered the number of job seekers, which means there’s less competition among those who are looking for work. More than 3 million jobs have been created since tax reform became law, and a typical family of four received a tax break of more than $2,000. All good news.
Like I said, there aren’t many people who enjoy tax season, but with all of the positive changes we’ve seen through tax reform, hopefully this year was a little less painful. There’s more to do, though, and Republicans in Congress are committed to building off of this success as we pursue additional pro-growth policies that will continue to put you in the driver’s seat of your own economic future.