Roskam: Tax bill law modernizes rules, promotes growth
For all its intricacies, Republican U.S. Rep. Peter Roskam says the new tax law does two things: modernize the tax code and promote growth in the American economy.
Roskam, one of the congressional leaders who guided the law to approval by President Donald Trump Dec. 22, recently told the Daily Herald's editorial board he strongly believes the changes will help constituents in his 6th District.
"The overarching significance of a good, pro-growth tax policy that is inclusive and is not for the few, but really tries to offer broad tax relief," Roskam said, "is, at its foundation, really significant long-term for the health of our country."
The Wheaton Republican said legislators wanted to update a system that last was overhauled in 1986, so they decided to take on debt to allow for lower tax rates overall for individuals.
Lower rates, he said, will put more money into consumers' pockets and drive growth.
"Anytime you're borrowing and you've got a $20 trillion debt, that's a controversial decision," Roskam said. "I think it was a good decision. I think it will bear out to be a good decision the further we get into the tax debate."
News that several high-profile companies, including AT&T, Boeing and Comcast, have given bonuses or raises because of the policy proves the change will help the economy, Roskam said.
While some say a bonus here and there isn't going to drastically alter the economy, Roskam said it can be a difference-maker.
"One thousand dollars is not crumbs to a lot of people in my district," he said. "You're a working family, you're trying to put it together, and $1,000 is a lot of money, and it has an impact on the things that you can do for your children and the things that you can do for your future."
The tax law's critics include the seven Democrats who are running in the March 20 primary, trying to become Roskam's opponent in November.
Democratic candidates said the new policy benefits the rich and creates a "path to inequality." They called for changes that would more strongly benefit the middle class.
One immediate effect of the tax law sparked a flurry of suburban residents prepaying property taxes, in hopes the payments can be deducted under old rules. New rules cap the amount of state and local taxes that can be deducted at $10,000, and many in the 6th District pay more than that in property taxes alone.
"The new law was silent as to the ability to prepay property taxes," Roskam said, but he said he is working closely with the Internal Revenue Service and the House Ways and Means Committee to try to ensure people will see the advantage of early payment.
Still, he said that analyzing the whole array of changes, including a standard deduction increased to $24,000 for couples and a child tax credit doubled to $2,000, the law will produce positive results. He said a sample family in the 6th District - with a median income of $135,000 a year for a husband, wife and two children - is projected to receive a $4,000 tax cut.
"When you evaluate all of these things," Roskam said, "even if the deductions go down, the way the rates are structured, it offers tax relief."
Critics say the tax law discourages homeownership and could decrease charitable giving because the higher standard deduction will lead fewer filers to itemize.
To both of these, Roskam says the answer is economic growth, which he says the tax law will provide. The more the economy grows, the more money people have, the more likely they are to buy houses, he said. And the more money people make, the more they have to give.
"We're a generous country," he said. "We celebrate this. We want a big civil society because we, as a country, have made a cultural decision as Americans that we highly value the nonprofit sector."