The once-in-a-generation overhaul of our nation’s tax code will cut the tax burden for Americans in every income bracket and unleash job creation
Washington, D.C. - U.S. Senator Susan Collins (R-ME) voted in favor of the Tax Cuts and Jobs Act, the first major overhaul of our nation’s tax code since 1986. This legislation will provide tax relief to working families, encourage the creation of jobs right here in America, and spur economic growth that will benefit all Americans. Senator Collins spoke on the Senate floor on Monday in support of the bill.
The Tax Cuts and Jobs Act includes three amendments Senator Collins authored that will further reduce the tax burden on hardworking Americans, enhance retirement security, and help families who are struggling to afford high medical costs. It also contains a number of additional improvements she advocated for, such as preserving benefits for higher education, protecting small investors, and retaining the historic tax credit.
“Americans deserve a tax system that is fair, simple, and promotes economic growth. This legislation will benefit lower- and middle-income taxpayers significantly, while providing a boost to our economy and encouraging small businesses to grow,” said Senator Collins. “I strongly advocated for several provisions that will provide significant tax relief for hardworking Americans, and I am delighted that they were included in the final legislation. While it is not perfect, this tax reform bill will put money back in the pockets of taxpayers, benefit American families, and spur the creation of good jobs.”
Most Maine Households Will See Their Taxes Lowered:
- The legislation nearly doubles the standard deduction to $12,000 for single filers and $24,000 for joint filers.
- The child tax credit will also be doubled from $1,000 to $2,000, and up to $1,400 of that tax credit will be refundable in order to benefit low-income families.
The 72 percent of Mainers who already use the standard deduction will have their taxes reduced. A family with $24,000 in income will pay no federal income tax. A single mother earning $35,000 with one child will see her taxes drop by nearly 4,000 percent. Instead of paying money to Washington, she will be getting back nearly $1,100 to help her make ends meet.
A couple with no children, earning $60,000, will see their taxes fall by more than $900. And a couple with two children earning $60,000 will get a tax cut of about $1,700—a reduction of more than 100 percent.
Maine Businesses Support Pro-Growth Tax Reform
- This bill provides important tax relief to small businesses, which employ nearly half of all workers and generate two-out-of-three net new jobs in our country. Under current law, small businesses’ tax burden can reach nearly 40 percent at the federal level. This legislation reduces pass-through small businesses’ effective marginal tax rate to no more than 29.6 percent.
- The legislation makes the United States a more attractive place to create jobs by reducing the current corporate tax rate from 35 percent, the highest in the developed world, to 21 percent.
Numerous Maine business leaders announced their support for tax reform and applauded Senator Collins’ support for the legislation, including:
- New Balance, which employs approximately 900 workers in Maine manufacturing sneakers: “Companies like New Balance, which already has a strong domestic manufacturing presence, will be able to increase investments in their facilities and be more globally competitive while remaining a U.S. company hiring U.S. workers.”
- Patrick Regan, general manager, Pratt & Whitney, North Berwick: “The reforms…will allow companies like ours to bring home earnings from abroad to invest in research and development, advanced manufacturing, energy efficiency and workforce initiatives…Pratt & Whitney plans to hire thousands of people over the next several years across our U.S. operations, and this tax reform will further support our efforts to help keep the U.S. a global leader in manufacturing and technology.”
- Eric Anderson, plant manager, GE Power, Bangor: “…I appreciate that Collins refuses to accept the status quo. If we level the playing field and operate under the same rules as our foreign competitors, companies like GE can compete and win global deals. That means workers in Bangor win, and so do our suppliers in Maine and nationwide.”
- Bruce Pulkkinen, owner, Windham Millwork: “[Tax reform] means Windham Millwork will have more money to spend on what matters — our workers and community. With the money we’ll save, we can create new jobs or offer better pay to our workforce.”
- Jean Ginn Marvin, innkeeper, Nonantum Resort, Kennebunkport: “…I know firsthand how important tax reform is for Maine families and businesses, especially small businesses. That’s why I applaud Sen. Susan Collins for voting in support of the tax reform bill that passed in the U.S. Senate – a vote that I am thankful for as a small-business owner.”
- Dana Connors, President of the Maine State Chamber of Commerce: “This historic bill is a step in the right direction to bring about needed tax changes that are absolutely critical to Maine’s families, Maine’s economy and Maine businesses…the compromise package that has come out of the conference committee is stronger and more comprehensive as a result of [Senator Collins’] work.”
- Barry Pottle, President and CEO, Pottle’s Transportation: “As an industry of small businesses — 97 percent of trucking companies operate with fewer than 20 trucks — trucking knows how reducing tax rates can spark a growing company. More money for our small business means investment in employees and equipment. More take-home money for our employees helps them provide for their families and keeps them happy when they come to work.”
- Lisa Martin, executive director, Manufacturers Association of Maine: “For the Manufacturers Association of Maine and its 400 members, who employ more than 28,000 highly skilled workers, tax reform is important for the retention and growth of Maine’s manufacturing sector… Our senior senator did not blindly accept the tax bill – she worked hard to shape the legislation in a way that benefits workers and businesses. Sen. Collins has it right when she says the revised bill will ‘provide much-needed tax relief and simplification for lower- and middle-income families.’”
- Curtis Picard, president and CEO, Retail Association of Maine: “After more than three decades, Congress finally passed much-needed and long-overdue tax relief for millions of families and businesses. For Maine and its nearly 9,000 retail establishments and over 80,000 retail jobs, this is a welcome relief for small businesses. We owe Sen. Susan Collins a heartfelt ‘thank you’ for helping push the Tax Cuts and Jobs Act over the finish line.”
Three Amendments Authored by Senator Collins Included in Bill:
Senator Collins’ amendments will:
- Allow taxpayers to deduct up to $10,000 for state and local taxes. This is especially important to Maine, which has the 13th highest state and local tax burden in the nation;
- Retain and reduce the income threshold for deducting medical expenses, which will help people with high medical costs, particularly seniors and people with chronic conditions. Approximately 8.8 million Americans use this deduction, nearly half of whom have incomes of $50,000 or less; and
- Reverse the original Senate language eliminating the ability of public employees like firefighters, school teachers, and police officers as well as clergy and those employed by charities and non-profit organizations to make “catch-up” contributions to their retirement accounts. These employees are generally paid less than their counterparts employed by for-profit companies and are thus less able to save for retirement. Senator Collins’ provision will allow them to continue making these important investments toward a secure retirement.