Cape News

Working families in the United States face a potential tax increase if the 2017 Trump tax cuts are not extended. This change could result in an average tax burden increase of 22 percent for taxpayers. A family of four earning slightly over $80,000 would pay an additional $1,695 annually, equivalent to about nine weeks of groceries.

Ways and Means Committee Chairman Jason Smith (MO-08) expressed concern over the impact of this possible tax hike. "For the past four years, Americans have watched high prices eat away at their paychecks and financial well-being," he stated. "A twenty-two percent tax increase would only compound that pain – particularly for lower-income Americans living paycheck to paycheck."

The Trump tax cuts initially reduced rates for all Americans, providing significant relief to those earning under $100,000 with an average cut of 16 percent. The top one percent saw their share of taxes increase, while the lowest income earners experienced a reduction in federal tax rates to levels unseen in 40 years.

Congress has limited time next year—149 legislative days—to prevent these cuts from expiring. Failure to act would mean not only higher taxes but also reductions in several benefits:

- The Child Tax Credit for 40 million families could be halved.

- Ninety-one percent of taxpayers might see their standard deduction decrease by half.

- Small businesses could face a top tax rate of 43.4 percent without the Section 199A Deduction.

- The Alternative Minimum Tax could affect seven million taxpayers once again.

- Two million family-owned farms may see their Death Tax Exemption significantly reduced.

Chairman Smith emphasized that Congress must work quickly to prevent these outcomes and assure American citizens that they will continue receiving necessary financial relief.