Hoeven Outlines Tax Relief Benefits for Small Businesses, Farmers, Ranchers and Workers

Vice President Pence Addresses Town Hall Event on Efforts to Provide Tax & Regulatory Relief, Empower Energy Development

FARGO, N.D. – As part of Vice President Mike Pence’s visit to Fargo today, Senator John Hoeven joined a panel discussion to outline the benefits of the tax relief legislation passed by Congress in December. Hoeven stressed how across-the-board tax relief, combined with regulatory relief, will unlock economic growth across industries in the U.S., including energy and agriculture, and will empower small businesses, farmers and ranchers to invest in their operations while also putting more money into the pockets of hardworking Americans. Following the discussion, Vice President Pence spoke about how tax relief works in tandem with regulatory relief, as well as Congress and the administration’s efforts to empower domestic energy production, to support a stronger, growing economy in North Dakota and throughout the nation.

“We are already seeing the benefits of tax relief in our state, with local companies providing bonuses for their workers and at least two utility companies announcing lower rates for their customers,” said Hoeven. “That means more money for working families from tax savings, higher wages and lower costs for goods and services. Further, our efforts to advance both tax and regulatory relief strengthen the core of our economy, including small businesses, farmers, ranchers and energy producers, leading to more good-paying jobs, a greater demand for labor and more 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

  • Ensures fair treatment for agriculture producers, including an agreement from the National Council of Farmer Cooperative and the National Grain Association to provide market equity, which was passed as part of the Fiscal Year 2018 funding legislation. 
  • 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 in December. Over time the tax relief bill will help grow the economy and will generate more revenue, not less.