Signed Into Law: Tax Reform

WASHINGTON, Dec. 22 -- Rep. Kristi Noem, R-South Dakota, issued the following news release:

Rep. Kristi Noem today applauded President Donald J. Trump on his signing of H.R.1, the Tax Cuts and Jobs Act. Noem was instrumental in crafting the legislation as a member of the House Ways and Means Committee and then a member of the small negotiating team that made the final deal. A farmer, rancher, small business owner and mother, Noem fought to double the Child Tax Credit, maintain the Child Care Credit, provide ag producers with better expensing tools, and lower tax rates across the board.

"I've thought back often on the South Dakotans I've met who have asked when it was going to get better. Today, things got better for the American people," said Noem. "I am proud to have fought beside President Trump for a tax reform plan that puts real money in people's pockets. A family of four in South Dakota making $54,000 will see a difference in their after-tax income of at least $1,600. That's $1,600 that can go back into our state and our communities, rather than into the greedy hands of Washington. I thank President Trump for his leadership and for working with us to give the American people more control over their paychecks."

The average household income in South Dakota is $54,000. Under current law, that family of four would face an $833 tax liability. Through the Tax Cuts and Jobs Act, however, the standard deduction is doubled, meaning the first $24,000 they earn would now be tax free. The Child Tax Credit is also doubled to $2,000 per child. And tax rates are lowered for that family to 12 percent. As a result, that same family would now receive a $781 tax refund, meaning there is a $1,614 difference in after-tax income.

Additionally, families can still take advantage of the Child Care Credit, home mortgage interest deduction, Adoption Tax Credit, charitable contribution deduction, and popular retirement savings options. The medical expense deduction and 529 Education Savings Accounts have also been enhanced.

Noem served as the only farmer/rancher on the final negotiating team, making her a critical advocate for South Dakota's number one industry. The legislation gives producers access to enhanced expensing tools, immediate deductibility, and like-kind exchanges. It also creates a 20 percent small business deduction that will benefit many farms and ranches as well as agricultural cooperatives. Death Tax exemption levels are also doubled, although Noem continues to push for full repeal.

Highlights of the Tax Cuts and Jobs Act

Lowers individual tax rates, setting them at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37% so people can keep more of their hard-earned money.

Nearly doubles the standard deduction to $24,000 for married couples and $12,000 for single filers.

Provides unprecedented support for families.

* Increases the Child Tax Credit to $2,000 per child.

* Eliminates the "marriage penalty."

* Preserves the Child and Dependent Care Tax Credit (also known as the Child Care Credit) to better support working parents.

* Preserves the Adoption Tax Credit.

Eliminates Obamacare's individual mandate tax.

Preserves the Home Mortgage Interest Deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $750,000, while grandfathering in existing mortgages.

Retains popular retirement savings options, such as the 401(k)s and Individual Retirement Accounts.

Permanently retains the medical expense deduction and lowers the threshold for two years at a pre-Obamacare level of 7.5% of adjusted gross income.

Improves vehicles for education by allowing families to use 529 accounts to save for elementary, secondary, and higher education.

Continues the deduction for charitable contributions.

Allows businesses to immediately write off the full cost of new equipment, which is critical for South Dakota's agriculture community.

Offers a first-ever 20 percent tax deduction that applies to the first $315,000 of joint income earned by S corporations, partnerships, LLCs, and sole proprietorships.

Lowers the corporate tax rate to a globally competitive 21%.