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Paulsen Highlights Wins for Middle Class in House-Passed Tax Bills

The House of Representatives this week approved a package of three bills that makes permanent the tax relief for middle class taxpayer and small businesses enacted by the Tax Cuts and Jobs Act last year, helps families save and thrive, and spurs job creation through entrepreneurship. TheProtecting Family and Small Business Tax Cuts Act, the Family Savings Act and the American Innovation Act were all approved by the House this week. The package included several provisions specifically championed by Congressman Erik Paulsen (MN-03):

  • Fosters Innovation and Entrepreneurship by helping startup businesses survive and thrive. Paulsen wrote about this provision and how entrepreneurship and innovation drives economic growth here, and also spoke on the House floor this week about this measure specifically. “Entrepreneurs and start-ups are a key source of innovation and job creation, particularly in Minnesota,” said Paulsen. “But the tax code today puts them at a disadvantage…This bill changes that. It brings the tax regulations governing start-ups into the 21st century. It will help entrepreneurs in capital-intensive sectors like medical devices make the necessary investments in research and development and manufacturing to grow and hire.”
  • Makes College More Affordable for Families by making student loans qualified expenses to be paid for with “529” tax-free college savings plans. Today, student loan payments are not a qualified expense, and withdrawing funds from the 529 to make student loan payments results in the funds being taxed as ordinary income, plus a 10% penalty. “This legislation would solve this problem by expanding the list of 529 qualified expenses to include student loan payments,” said Paulsen in remarks on the House floor. “It would allow the family to use up to $10,000 in 529 savings to help pay down loans. This will make it easier to pay off loans and mitigate the anxiety that comes with starting a career after graduation.”
  • Lowers Health Care Costs for Seniors by extending the expansion of the medical expense deduction included in the Tax Cuts and Jobs Act. The 2017 legislation expanded the eligibility of medical expenses from 10 percent of gross income to 7.5 percent of gross income for 2017 and 2018. The Protecting Family and Small Business Tax Cuts Act extends this expansion through 2020. “Extending the expansion of the medical expense deduction will benefit more than four million Americans," Paulsen said. 

For more information about the tax package approved this week, click here.