NOEM: New year, new tax code
It's a new year, and Americans have a new tax code. On January 1, the Tax Cuts and Jobs Act took effect, delivering relief to families across the spectrum. I've received many questions from folks since the bill's passage: How will it impact my family? What does it mean for South Dakota? During the first few days of January, I fought the frigid temps and hit the road to answer many of these questions.
The first stop was Black Hills Bagels in Rapid City. Debra Jensen first opened the bakery in 1997 and has since expanded to two locations. South Dakota is home to around 83,000 small businesses like this. They employ nearly 60 percent of our state's workforce, and through tax reform, many will have access to a new small business deduction, lower tax rates and better expensing tools. Each of these provisions were designed to keep more money locally, better ensuring that what we make in South Dakota is spent in South Dakota to grow wages and create jobs at home.
After making a few more stops in Rapid City, we headed east. In Brookings, I dropped by the home of Luke and Emma Perkins. They've been married a little over four years, have two beautiful children with another due in March, and work for Equip Campus Ministries at South Dakota State University. For young families like theirs, we double the standard deduction, meaning the first $24,000 a couple makes is tax free. The Child Tax Credit is doubled to $2,000 per child. And on top of that, we lowered tax rates.
Let's say Luke and Emma make $78,000 as a couple. Under the old tax code, the family's 2018 tax bill would be more than $2,600. With tax reform, it would drop to $99.
Next, I held a lunch with some young, Sioux Falls moms. We talked about the standard deduction and Child Tax Credit as well, but we also spent some time discussing the Child Care Credit. South Dakota has the highest rate of working moms in the country. The Child Care Credit is specifically designed to reduce the burden of day care expenses for working families.
Additionally, we touched on some of the other individual benefits that are there to give a little boost when you reach big life milestones. This includes the mortgage interest deduction, retirement savings options, and the enhanced 529 education savings plans.
After a stop at Double D Western in Huron and a night at home with my own family, I stopped in at Titan Machinery in Watertown. Farmers need a lot of expensive equipment to operate each year. To help producers manage cash flow, tax reform includes immediate expensing of the equipment they buy at places like Titan.
The week's final stop was at Aberdeen's 3M plant. By bringing our business tax rate in line with the rest of the developed world's, we make America a more competitive place to do business. Through tax reform, we also eliminated the incentives that currently reward companies for shifting jobs, profits, and manufacturing plants abroad. It's time to put America first.
Already, we're seeing new jobs being created while dozens of American companies have given hundreds of thousands of employees significant raises or bigger Christmas bonuses as a result of tax reform.
I believe it's incredibly important that South Dakotans understand exactly what was included in the tax reform package, which is why I took to the road in recent weeks. There's a lot of misinformation out there and you deserve the facts. While no tax reform package will be perfect for every family, this legislation is packed with benefits for hardworking South Dakotans that keep more money in your pockets and our communities. I was proud to be part of negotiating this landmark legislation. Happy New Year — and welcome to a new tax code.