Valley residents are taxed too much, the United States is falling behind other countries competitively, we continue to lose American jobs overseas, and we are over $20 trillion in debt. Last week, the House took a big step toward addressing these issues by introducing a tax reform bill that will reduce the tax burden of individuals and families in all tax brackets, make our businesses more competitive, and grow our economy. If passed and signed into law this year, this bill will provide much-needed tax relief for Americans starting January 1.
These are bold predictions, and The Tax Cuts and Jobs Act will achieve these goals by cutting rates, removing loopholes and special interest tax credits, bringing overseas profits of American companies back to our shores, and encouraging business investment in our communities. Under this plan, the typical American family of four will see a tax cut of $1,182. With the holidays upon us, that extra money would go a long way toward providing gifts for your loved ones, new coats and shoes for rapidly-growing children, paying off a bill, taking a family vacation, or just saving for a rainy day.
As a hard-working taxpayer in the Central Valley, you deserve more money in your pocket, less time and money spent navigating our burdensome tax code, more job opportunities, and the ability to save for college or invest in your retirement. About 70 percent of the people I represent claim the standard deduction - a number that rises to about 95 percent after the standard deduction is doubled. This means the first $12,000 per year an individual earns (up from $6,350) and the first $24,000 per year a family earns (up from $12,700) is tax-free.
If you are among the 5 percent who will continue to itemize, your tax rate will be cut significantly, and the repeal of the Alternative Minimum Tax will further lessen your tax burden.
For the first time in years, businesses of all sizes will be able to make new hires and investments, and those who have considered opening a small business will finally find the American Dream within reach. Small business rates will be cut to no more than 25 percent- the lowest tax rate on small businesses since World War II - which will allow businesses and jobs to stay in the Central Valley.
We've also seen U.S. companies move operations to the United Kingdom, where the tax rate is 19 percent, or Sweden, where the tax rate is 22 percent, simply to remain competitive. This plan provides incentives for those employers to bring back those American jobs. For those who have left our dire job market, there will finally be more employment opportunities. The proof is in the stock market where, over the past six months, we've seen historic highs in anticipation of this tax plan.
The Tax Cuts and Jobs Act presents the first opportunity in three decades to create a fairer, simpler tax code that lowers rates, promotes real economic growth, creates jobs, and puts more money in workers' pockets at the same time. I am encouraged by this proposal before us, and I invite you to read it and contact my office with your comments for consideration as we move forward in this process.
Congressman Jeff Denham represents California's 10th congressional district, which includes Stanislaus County and a portion of San Joaquin County. He is the chairman of the House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials and also serves on the House Committees on Agriculture and Natural Resources.