Businesses across our economy – both small businesses supporting communities across Nebraska and manufacturers making and selling products at home and abroad – thrive under a broad-based tax code that rewards hard work and American innovation. The 2017 Tax Cuts and Jobs Act (TCJA) helped raise wages, drive economic growth, and reduce the tax burden on Americans, while also increasing revenue. In fact, every major federal tax cut since the 1980s has led to increased federal revenue in the ensuing years. When TCJA was enacted, the non-partisan Congressional Budget Office (CBO) projected it would decrease revenue by $2.3 trillion over the next decade. In reality, federal revenue in 2022 was more than $700 billion higher than CBO projected it would be in its last budget model prior to TCJA enactment, with federal revenue increasing by 43 percent over the past two years alone.
This week, the Ways and Means Committee considered a package of bills to build off the success of TCJA, bring further tax relief to families and small businesses, get Americans off the sidelines of the economy, and cut red tape to unleash innovation.
Included in this package are measures to roll back burdensome IRS reporting thresholds, restore tax competitiveness for American businesses, and prevent foreign adversaries from purchasing American farmland. These policies address major concerns I’ve heard from Nebraskans, and I was glad to support each of these bills.
In addition to lowering tax rates for every family and doubling the Child Tax Credit, TCJA also simplified tax filing and lowered taxes by doubling the standard deduction, which is now $13,850 for an individual and $27,700 for a married couple. Thanks to this guaranteed deduction, nine out of ten families can file their taxes more easily, and – alongside the increased child credit – a family of four doesn’t pay a cent of federal income tax until they have surpassed $66,300 in income. One proposal our committee passed this week would increase the standard deduction by another $4,000, allowing more taxpayers to avoid itemizing, while also reducing the tax burden on even more working families.
Another piece of this week’s tax package would repeal a 2021 law that reduced the IRS threshold for the 1099-K form to $600. Form 1099-K is used for reporting income from online payments and transactions. Unfortunately, this low threshold – pushed by Democrats to pay for their $1.9 trillion stimulus – would capture many innocent Americans for audits based on activities like sharing the cost of meals or selling used personal items at garage sales. This provision is so onerous the Biden administration unilaterally delayed enforcement last year, despite having questionable legal authority to do so. While I strongly oppose this new threshold, we should stop it the correct – and permanent – way: through legislation.
Finally, the package also included provisions to ensure job creators of all sizes are able to innovate, plan more strategically for the future, and invest in their businesses to grow our economy. These provisions will help ensure the U.S. remains a world leader in developing new products, manufacturing them domestically, and selling them around the world. This forward-looking economic package will benefit American families, workers, and small businesses, and I will continue working with my colleagues on both sides of the aisle on commonsense policies to address the challenges Americans everywhere are facing.