Hoeven Highlights Tax Relief with Local Small Business Owner, Veteran, Part-Time Worker & Ag Producer

BISMARCK, N.D. – Senator John Hoeven today held a tax reform discussion with Jeff Hinz, owner of Ace Hardware in Bismarck; Cyril and Peggy Puetz, a retired U.S. Army veteran and part-time worker, respectively; and John Weinand, a farmer from Hazen and board member of the North Dakota Grain Growers Association, to outline how the tax relief plan benefits North Dakotans. The new law lowers rates across-the-board for hard-working American individuals and families and provides relief for North Dakota small businesses, farmers and ranchers.

“We worked hard to ensure our legislation lowers the tax burden on North Dakota’s small businesses, farmers and ranchers,” said Hoeven. “Small businesses create the vast majority of new jobs, and this relief will help them invest in their operations, increasing demand for labor and pushing wages higher. So not only will individuals and families see growing wages, they will also be able to keep more of their paychecks due to provisions like doubling both the standard deduction and the child tax credit. Our legislation is all about tax relief for Americans across-the-board and a stronger economy to increase wages and long-term government revenues.”

Highlights of the Tax Cuts and Jobs Act

Middle-class Americans will see a tax cut of:

  • More than $1,300 for a single parent with one child earning $41,000.
  • More than $2,000 for a median income family of four earning $73,000.
  • More than $2,600 for a married small business owner earning $100,000.

Cuts Tax Rates Across the Board for Hardworking Individuals and Families

  • Increases the standard deduction, which means that Americans will not be taxed on the first $12,000 of income for individuals, $24,000 for married couples and $18,000 for a single parent with dependents. 
  • 9 out of 10 taxpayers will likely use the expanded standard deduction.
  • Maintains the state and local tax deduction up to $10,000 for individuals and families.
  • Doubles the Child Tax Credit to $2,000 per child
  • Preserves the Child and Dependent Care Tax Credit
  • Encourages businesses to provide paid family and medical leave by providing a tax credit
  • Preserves the Adoption Tax Credit
  • Retains Retirement Savings Options
  • Continues tax deductions, including for: 
    • Student Loan Interest and Tuition Waivers
    • Medical Expenses
    • Charitable Contributions
    • Home Mortgage Interest

Benefits to Small Businesses, Farmers and Ranchers

  • For the first five years, allows full expensing or writing off the cost of new investments, which is phased down over an additional four year period.
  • Expands the Section 179 expensing of equipment on a permanent basis.
  • Doubles the estate tax exemption, while maintaining the step-up in basis for capital gains.
  • Maintains interest deductibility and the property tax deduction for small businesses, farmers and ranchers.
  • Creates a tax deduction of 20% for qualified pass-through income, which reduces the tax burden for small businesses set up as partnerships or pass-through entities.
  • Reduces the tax rate for C corps from 35% to 21%, making the U.S. tax system more competitive globally and bringing more capital and investment back to the U.S. 
  • Maintains the IC-DISC program, which enables small and medium businesses, including manufacturers, to reduce taxes on portions of their export income. 
  • Includes Hoeven’s amendment to allow implement and auto dealers to fully expense interest on inventory.

Tax relief, combined with regulatory relief, will empower economic growth leading to greater government revenues. While some have claimed the legislation will lead to cuts under pay-go rules, these rules have never been enforced and Congress voted to waive the rule last week. Over time the tax relief bill will help grow the economy and will generate more revenue not less.