This Thanksgiving I am thankful to be a wife and stepmom — more precisely, a stepmom to a brand-new kindergartner. I am also thankful that after almost three decades, our nation is once again reforming our tax code to make life better for families like my own.
When I was the age of my stepson, my family was still new to the United States. We left the Caribbean in 1985 with just a few suitcases of clothes to start over in the land of opportunity.
Life was hard. Both of my parents worked more than 40 hours a week to make a comfortable life for me and my brother. As a construction worker and an entry-level accounting staffer, my parents earned less together than I made in my first job out of college.
Yet, they saved to purchase our first car — a little red Toyota Carolla we affectionately called “the red car.” Then they managed to set aside thousands of dollars for a down-payment on a home that would move us out of a violent Boston neighborhood. Buying a home was one of the most important achievements in our family’s American dream.
Because of the Tax Reform Act of 1986, my high-school-educated parents and their school-age kids benefited from reforms like the expansion of the standard deduction and the earned income tax credit.
Now, 30 years later, Congress has the significant chance to provide tax relief to individual workers, businesses and families like my own.
Despite the negative characterizations, the tax reform bill passed by the House and the bill under consideration in the Senate both include important provisions that will help families struggling to make ends meet or to save for their future.
Both raise the child tax credit — to $1,600 in the House bill and to $2,000 in the proposed Senate bill. The House also added a $300 tax credit for each non-child dependent in the household, which will help families taking care of grandparents or extended family members — something my family did for about a decade when I was growing up.
Both plans nearly double the standard deduction for individuals and for married couples to $12,000 and $24,000, respectively. While some itemized deductions may be eliminated or changed, the increased standard deduction will cover those expenses for many filers.
Simplifying the tax code could lead to none out of 10 tax filers filing their taxes on a postcard. Today, 90 percent of Americans need professional help to do their own taxes, so this effort could save dozens of hours and hundreds of dollars each American spends trying to comply during tax season.
American families will most immediately feel the difference of lowered individual tax rates. While the House bill consolidates the rates from seven to four, both bills will deliver tax cuts for lower- and middle-class Americans.
Consider these scenarios: A family of four earning a median income of $59,000 a year will get to keep $1,100 more of their hard-earned money. A single mom with a daughter working a $30,000 job will see her refund check increase $700, thanks to reforms under the House plan.
Women tend to make the household budget decisions, and we are very aware of what an additional $700 or $1,100 means for our families. For my parents, that savings would’ve paid for our annual family trip to the woods of New Hampshire and increased our down-payment savings account.
Today, my husband and I look forward to continuing to rebuild our savings, which we used to invest when we bought our first home last year like other older millennials.
The Great Recession’s high unemployment, lingering underemployment and staggering student loan debt weighed millennials down just as we reached the age to experience generational milestones such as getting married, starting families, and buying homes of our own. That left millennials behind where our Baby Boomer parents were at the same point in their lives.
Millennials were toddlers during the last historic tax reform effort. Three decades later, Congress has a chance to help us catch up, and I hope they follow through.
Three generations of family will gather at our home to celebrate Thanksgiving. Collectively, we are thankful to God that our parents pursued their dreams of leaving us a better future than if we remained in the Caribbean.
Now, as we forge ahead in pursuing our own American dreams, I hope our national leaders will play their role by reforming our tax code for the better.