What tax reform means for California and New York

Apr 13, 2018 | Communications •

We promised more jobs, fairer taxes, and bigger paychecks, and with the Tax Cuts & Jobs Act, we delivered.

This coming Tuesday, April 17, will be the last Tax Day families will file their taxes under the outdated, complicated tax code. Next year, Americans can look forward to lower tax rates, a nearly doubled standard deduction, a doubled Child Tax Credit, a simpler process, and relief from Obamacare.

What else has tax reform done to help families, workers, and small business owners? For that, let’s take a look at the stories representatives from California and New York shared on the House floor.

As Rep. Mimi Walters (R-CA) notes in her opening remarks, California and New York are two of the highest taxed states in the country. Who better to benefit from federal tax relief? In fact, a typical middle-income family of four in California will see a tax cut of $2,840. In New York, $3,129.

And under the Tax Cuts & Jobs Act, individuals and families continue to have the ability to deduct property and income taxes – or sales taxes – up to $10,000. There’s even more good news for New York and California, with many of their local businesses among the 500+ who have offered more than $4 billion in bonuses to millions of Americans.

For more on the specifics of our pro-growth, pro-family tax reform visit FairandSimple.gop. And be sure to check out what these representatives had to say:

REP. MIMI WALTERS (R-CA):

“When it comes to taxes, our two states have something in common: some of the highest state tax rates in the country. My district in Orange County, California, is home to great people, beautiful weather, and a rich history, but it is also located in [a highly taxed state]…It is my duty to find ways to help my constituents build and achieve their American Dream, whether it is opening a small business, sending their children to college, or saving for retirement. Unfortunately, high taxes can prevent these dreams from becoming a reality.

“While the state legislatures in Sacramento and Albany keep placing crushing tax burdens on their residents, congressional Republicans take action to lower the federal tax burden on hardworking Americans and job creators in our districts. The Tax Cuts & Jobs Act did just that by lowering rates and restoring the ability of American companies to compete globally. For too long, our tax code was broken. It imposed high tax rates on families, individuals, and small businesses; it was full of special interest loopholes; it contained a tax structure that encouraged companies to ship jobs overseas; and individuals, families, and job creators spent nearly 9 billion hours each year preparing their taxes, which cost the economy $400 billion in lost productivity.

“Last December, we addressed those issues and fixed our outdated tax code when we passed the Tax Cuts & Jobs Act. This legislation lowers rates for nearly every taxpayer, doubles the standard deduction for individual and joint filers, and maintains popular deductions that will help working families in cities like Irvine, Mission Viejo, and Tustin. When the new withholding rates took effect in February, Orange County residents saw their take-home pay increase. Now, families and individuals are rightfully keeping more of their hard-earned paychecks.”

“Local businesses are benefiting, allowing them to create jobs and provide higher wages for their employees. One example is the Walt Disney Company, Orange County’s largest employer and the place where I held my first job as a senior in high school. With their savings under the new tax code, Disney gave each of its 125,000 employees a $1,000 cash bonus. Disney also established a new higher education initiative that will cover tuition costs for hourly employees. STERIS, a medical device company, has several facilities throughout the state of California, including one in Tustin. Following the enactment of the Tax Cuts & Jobs Act, STERIS gave its employees a $1,000 bonus. Throughout the country, millions of Americans are benefiting from tax reform, and STERIS is an example of a company making those benefits a reality for my constituents in Tustin, California.”


REP. STEVE KNIGHT (R-CA):

The reduction in the corporate tax rate enables U.S. companies to compete on a level playing field with foreign businesses without having to move their headquarters abroad. Here in the U.S., in each of our districts, they can invest their savings back into their businesses. This is because the reform changes the equation for what will make them more profitable.

“The Tax Cuts & Jobs Act now means that expanding factories and payrolls here in the U.S. make better business sense. Northrop Grumman, which has a significant presence in my district, California’s 25th, announced it would increase capital expenditures by 10 percent and provide a $1,000 per year contribution for each of their employees’ retirement accounts.

Millions of Americans have received increases in their paychecks. Check your check. The Treasury Department estimated that 90 percent of Americans will now receive more take-home pay. The reform reinforced positive trends we have experienced over the past few years. U.S. jobless claims have fallen to their lowest level since 1973. Setting politics aside, this bill lifts burdens on U.S. businesses and taxpayers to allow everyone to invest more and save more. We can all see the effects of these changes today, and we will continue to see them play out over the coming months and years.”


REP. DAVID VALADAO (R-CA):

“… tax reform is something that has a real impact on people every single day. The Central Valley happens to be what I would say, and I think a lot of people would agree, some of the hardest working people in the United States. When you drive throughout the Central Valley and you see people out in the fields working really hard in some of the warmest weather, some of the hottest weather, it has a real impact on people; and giving these people an opportunity to be able to keep more of their money is something I think is very important.”

“I have heard it myself as I have gone around the district talking to constituents; people stopping me in the grocery store bringing up the fact that they are already seeing things in their paychecks. I have even had employers tell me that their employees walked up to them and talked a little bit about the difference they are seeing. The Central Valley is an area that needs this more than a lot of other areas.

“When you look at the median income, Central Valley, or at least the 21st Congressional District, is about $40,000. So when you talk about doubling the standard deduction—before this tax plan went into place, about 83 percent of the people filed the standard deduction. Now, with doubling that standard deduction, you are going to see upwards of 90 to 95 percent of people filing the standard deduction. What does that mean? That means, in the past, people only keep about $12,000 of their first income tax-free. Now they are going to go forward and have the opportunity to earn $24,000 without being taxed. So the first $24,000 isn’t going to be touched, and that is impressive.

“Then, throughout the Central Valley, a lot of folks, with their children, having families, something that, myself, with three kids, something I am very proud of, we are doubling the child tax credit. We are going from $1,000 to $2,000. That is going to have an impact on about 64,000 people in the 21st Congressional District. 25,000 constituents own small businesses. This new law will help them grow their businesses and help them be more successful. In fact, some economists say that this new law will help create about 111,000 jobs in the state of California.

“This tax bill is going to have a positive impact throughout the 21st Congressional District. We are already starting to see it now, and we are going to see it going forward. As this new bill takes effect, people throughout the 21st Congressional District will see an annual tax savings of about $1,300, almost $1,400. This is real relief for people; and no matter what anyone else goes out and says, this is not peanuts. This is not a small amount. $1,400 has a real impact on people being able to buy groceries; being able to save for their kids’ education; being able to keep their families comfortable, if it is running the air conditioner or keeping the house comfortable. These are all things that have a real impact on people’s everyday lives, so I am thrilled to be able to come here and talk a little bit about the positive impact that we are having throughout the 21st, and I am looking forward to seeing how much more we do.”


REP. CLAUDIA TENNEY (R-NY):

“Taxes are, of course, extremely important in New York State as being one of the highest taxed States in the Nation, along with California, an undistinguished honor that we don’t want to have. But I rise today to actually recognize the thousands of hardworking families across the 22nd District of New York, and throughout upstate, who have felt the real impact of the Tax Cuts & Jobs Act.”

“No longer will American businesses and families suffer under an unfair and oppressive tax code from Washington. Here in New York, tax reform has provided once-in-a-generation relief from the failed status quo, a status quo that was created in part and mostly by Albany politicians whose seemingly only intent is to tax and spend, and I dare say, waste our hard-earned money.

“Under the Tax Cuts & Jobs Act, the typical middle class family of four in New York’s 22nd District, which I represent, will see a tax cut of $2,439. Imagine what kind of money that could do for a family of four. Now, families will have the opportunity and means to save for college, plan for the future, invest in their retirement, and provide their children with increased educational opportunities. Families know how to spend their resources much better than the federal government. That is why we are putting real money back into the pockets of hardworking families, money they earned, and money they deserve to keep.

“…One of the key provisions that we New Yorkers fought tirelessly to include is the state and local tax deduction or, as you heard often, the SALT deduction. I would like to thank Chairman Brady and everyone on the Ways and Means Committee for understanding the importance of this deduction and what it means to my constituents. As a result of our advocacy, nearly all of my constituents in the 22nd District will be able to continue to claim a SALT deduction. It is also flexible, which means it can be used for property sales or income tax, and not just restricted to local tax. In the 22nd District, 99 percent of itemizers deduct less than $10,000 in property taxes. This provision will cover the overwhelming number of property owners who own homes of less than $450,000 in value..”

“The reason the SALT deduction matters stems from Albany politicians who have no regard for the taxpayers they represent. For example, all eight of the counties that I represent are in the top 36 highest property tax rates compared to home value nationwide per county. This bill provides relief on the federal level, while finally taking a step to encourage fiscal responsibility from Albany. I have always put the taxpayers I represent first, and it is long past time for politicians in Albany to do the same, and we are hoping that this bill will incentivize them to do that to help our taxpayers.

“The benefits from the Tax Cuts & Jobs Act do not stop there. Earlier this year, I heard from Frank Suits. Frank is the president and CEO of Suit-Kote Corporation, a family owned, multigenerational paving company in Cortland, New York. Frank wrote to me to share the impact tax reform has had on his business and nearly 800 employees. First, in direct response to the new tax law, Suit-Kote announced plans to match the federal tax cut and provide its employees with a two percent retroactive pay increase and has begun to accelerate 401(k) contributions for 2018 by four months to provide employees additional funds in their retirement accounts. Our goal in passing the Tax Cuts & Jobs Act was to deliver this type of relief to hardworking families like those employed by Suit-Kote, and it was an honor for me to actually go to SuitKote and meet with the employees and hear from them, firsthand, just how great their benefits were from the Tax Cuts & Jobs Act.

“We also heard that NBT Bank, a local bank in my region, with dozens of locations throughout the 22nd District, has used tax reform to invest in its employees. NBT decided to raise the starting hourly rate of pay from $11 to $15 an hour, without a mandate coming from the government, merely because of the benefits from tax reform. Employees earning $50,000 or less will receive a permanent minimum increase of 5 percent this year.”

“While these companies are based in the 22nd District, there are dozens of other companies with branches in my district that are reaping the benefits of tax reform. For example, CVS is increasing its wages for hourly employees from $9 to $11 an hour. Home Depot, with a location right next to my New Hartford office, is giving employees a bonus of up to $1,000, with the chairman and CEO of the company stating it was directly made possible by the tax reform bill. Lowe’s and Walmart are also giving back to their employees as a direct result of the Tax Cuts & Jobs Act. All three of these corporations have numerous locations across my district and employ hundreds of hardworking citizens throughout NY’s 22nd.

“Critics of the Tax Cuts & Jobs Act have called this law and its benefits crumbs, or Armageddon, as you famously heard. They have also called this law a handout to the one percent. Time and again, they have been proven wrong.”


REP. CHRIS COLLINS (R-NY):

“When Republicans in Congress and President Donald Trump started working on tax reform, Democrats immediately began attacking the bill before it was even written. They deliberately spread lies to the American people, which caused chaos and confusion, in an effort to derail our progress. The working families in western New York now know the truth because they have seen an increase in their paychecks.

“The Tax Cuts & Jobs Act is making our economy stronger and benefiting American families and businesses, both big and small. The business community is responding and taking action by giving raises, bonuses, and other employee benefits as a direct result of tax reform.

“In western New York, thousands of workers are reaping the benefits. M&T Bank, in Buffalo, increased the base wages for hourly employees, gave all employees 40 hours a year in paid time off to volunteer in their community, and significantly increased contributions to the M&T Foundation.

“Pioneer Credit Recovery in Arcade, New York, gave a $1,000 bonus to each of their 800 employees.

“Evans Bank in Hamburg also gave $1,000 bonuses to non-senior level employees and increased charitable donations.

“Everett J. Prescott, Incorporated, gave $1,000 bonuses to employees with more than a year of service and $250 bonuses to employees with less than a year of service.

“Financial Institutions of Warsaw gave employees a bonus of $500.

“LiDestri Food and Drink in Rochester gave all of their 1,200 employees in their five U.S. facilities an extra full paycheck.

“Environmental Construction Group in Albion, New York, gave each of their 50 employees a $500 bonus.

“National chains that employ many of my constituents have also given bonuses: T.J.Maxx, Walmart, AT&T, Home Depot, Chipotle, Lowe’s, Starbucks, U-Haul, FedEx, Apple, and the list goes on and on.

“The liberal left calls these pay increases and bonuses crumbs, but my constituents know tax reform is a significant win. Because Republicans have reformed our complicated and outdated tax code, our children and grandchildren will be able to participate in a growing economy. The truth is tax reform is a positive step in making America great again.”


REP. JEFF DENHAM (R-CA):

“In the midst of all the rhetoric around here, the partisanship, the Washington spin outside of this building, it is important that we don’t lose sight of who actually won in this. It is the people in my district. People in places all across the country. It is Americans who won by changing the tax code.

“This bill will allow businesses to grow, to continue to give bonuses and raises. Small businesses will now have the flexibility to make new hires and investments, thanks to the new 20 percent deduction for qualified passthrough companies. It is a deduction to make sure we are hiring new people. They will also be able to immediately write off the full cost of purchases of new and used equipment, making their goals to expand operations a reality. This gives them the opportunity to take the money that they are making, the profits that they are making to go out and buy new equipment, buy new supplies, and be able to hire more people and bring them into their company.

The bill is also good for agriculture. That is my district’s biggest economic driver. It [changed] the harmful estate tax and includes supportive export provisions that help our local farmers compete and sell their crops on the national market. The bill is good for our communities. It creates a new pathway for investments to flow directly into lower income areas. These newly designated opportunity zones will receive the necessary capital infusion to jump-start their economies and support our local residents. Most importantly, the bill is good for individuals and families. It cuts rates across the board and doubles the standard deduction. It also bolsters the value of the child tax credit.”

“Now, since this bill passed, being home in the district, I have been to the bank and talked to people. In the grocery store, people have come up to me and told me what a difference this has made in their paycheck—$50 a week, $100 a paycheck, $200 a month. It is real money adding up to the people in my district.

“Mr. Speaker, I am proud to have supported this bill for the expansion it is going to enable in our businesses, for the new jobs it is going to create, and for the people who are going to see it in their paychecks every paycheck. I recently did a roundtable. We called in businesses and tax accountants and experts on the tax code, all together, not only to look at what this new bill has done, but specifically how we would see job growth in our community. Time and time again, I heard from businesses independently owned that talked about the expansion that they are going to see. We will see a great expansion in growth across this country: seeing money that was invested overseas coming back and reinvested here, markets that we have lost that will now be coming back. Manufacturing, building things again, that is what this bill is all about, supporting American families and the pursuit of the American Dream. Mr. Speaker, I am proud to have supported the Tax Cuts & Jobs Act.


REP. TOM MCCLINTOCK (R-CA):

“Mr. Speaker, I think it is important to ask ourselves how legislation is actually doing once it has passed; and four months after tax reform, I think it is time to reflect on that…In my California district, the average family is paying $1,900 less federal income tax this coming year. That means 1,900 more dollars that they can spend to meet their own needs.

“The real importance of tax reform is expanding our overall economy…One provision of the measure allowed companies to write off the full cost of equipment purchases when they make the purchase. But what does that mean in real life? Well, Ken Steers is president of Freight Solution Providers, a local shipping company in my district that provides worldwide transportation logistics for businesses large and small. He tells me that since the tax reform took effect, his shipping orders for manufacturing equipment have gone through the roof and haven’t let up.

“Before the tax reform, our corporate tax rate was 35 percent, the highest in the industrialized world. We reduced it to 21 percent. Aslam Malik is CEO of AMPAC Fine Chemicals in Sacramento and El Dorado Counties. They produce the active ingredient in several cancer and epilepsy drugs. He said they could outcompete their European competitors in terms of quality and technology and service, but many customers told him that even if their product was free, the American tax made AMPAC noncompetitive. Well, I checked back with Aslam this week. They have already added $2 million to their budget for expansion because, literally, a whole new world of business opportunities has opened up for them.

“Now, the left says this is just tax relief for the rich. Obviously, they don’t understand that this is precisely what produces higher pay, better jobs, greater opportunities, and stronger financial security for every American. I attended the Oakhurst Rotary Club last week. They have a tradition of donating dollars to the club as they report good news in their own lives. One Rotarian had been out of work for nearly two years. He was on the verge of despair. With tears in his eyes, he announced to the group that he had just landed his dream job with Pfizer pharmaceuticals and that he would now be able to keep his home and stay in the town that he loved. Relief was written all over his face.”