WASHINGTON, D.C. – U.S. Senator Richard Shelby (R-Ala.) today highlighted the benefits of this year’s historic tax reform, the Tax Cuts and Jobs Act, on Tax Day. The bill – which passed Congress and was signed into law in December 2017 – lowers rates for individuals, doubles the standard deduction, doubles the child tax credit, eliminates the individual mandate tax, and helps incentivize saving for retirement and other needs.
“When Congress passed the Tax Cuts and Jobs Act, we made huge progress in simplifying the tax code and increasing efficiency,” Senator Shelby said. “Today is the last Tax Day that Americans will file their taxes under the old, broken system. Hard-earned money will finally go back into the pockets of the American taxpayer.”
Tax reform is already helping to create the kind of economic environment employers need to grow their businesses, create jobs, and increase wages. At least 505 companies have announced pay raises, bonuses, 401(k) match increases, cuts to utility rates, and/or other benefits as a result of tax reform.
Earlier in the 115th Congress, Senator Shelby introduced the Simplified, Manageable, and Responsible (SMART) Act to establish a flat tax on all income. Senator Shelby has introduced similar legislation each Congress since was elected to the Senate in 1986.
Senator Shelby continued, “Every year on Tax Day, I highlight the SMART Act as a straightforward solution that would require taxpayers to file only a simple postcard size return, saving Americans time and money. The SMART Act would also allow businesses to focus on expanding their businesses and creating jobs rather than directing resources toward tax compliance.”
The SMART Act establishes a flat income tax of 17 percent on all income. The only exemptions would be personal exemptions of $14,590 for a single person; $18,630 for a head of household; $29,190 for a married couple filing jointly; and $6,290 for each dependent. These allowances would also be indexed to the consumer price index in order to keep inflation from raising our tax burden. To prevent the double-taxation of income, earnings from savings would not be included as taxable income, resulting in an immediate tax cut for virtually all taxpayers.
By closing loopholes for individuals and businesses, the SMART Act would create broad-based lower tax rates that would give American individuals and businesses a competitive edge. This would help produce and retain jobs in the United States and curb offshoring.