A tax code that lets families keep more of what they earn

As a father and small business owner, I know tax time can be stressful for so many families across the nation. Thanks to the Working Families Tax Cuts passed by congressional Republicans and signed into law by President Donald Trump, more families are keeping more of what they earn. This tax season is shaping up to be historic for Pennsylvanians. 

This tax season, hardworking Americans in Pennsylvania and across the country are experiencing larger refunds and increased take-home pay. The average tax refund is up nearly eleven percent this year. Refunds are topping $3,500. Millions more Americans will see an immediate boost in their paychecks as they adjust withholding and benefit from the lower tax rates made permanent by the legislation. 

This tax season could have looked a lot different. Had Congress failed to act, families would have experienced a massive tax increase. Congressional Republicans not only prevented the largest tax hike in history, but we strengthened our tax code to directly support working families across the nation. 

From workers on a factory line, to seniors, parents, farmers, and small business owners, these refunds are not limited to one group or region — they are being felt by millions of Americans nationwide. 

More than 20 million Americans, including manufacturing employees, police officers, and construction workers, have claimed the no-tax-on-overtime provision. These Americans work extra hours to provide for their families. Our tax code should reward work, particularly for those who work long hours in jobs that keep our economy moving.

Seniors are also seeing meaningful relief. With more than 26 million benefiting from an increased standard deduction for seniors, the Working Families Tax Cuts effectively eliminate taxes on Social Security for 88 percent of recipients. Pennsylvania’s Independent Fiscal Office released a report saying the increased federal senior standard deduction will put over $1 billion back in the pockets of Pennsylvania’s seniors. After paying so much of their earnings into the tax system, seniors across Pennsylvania and the country are able to keep more of the benefits they have worked hard for.   

Delivery drivers, bartenders, babysitters, and more than five million taxpayers have benefited from no tax on tips, giving these essential workers a powerful new tax break. For workers in the hospitality industry in the Eleventh Congressional District, including the tourist destinations of Lancaster and York counties, this will be a significant boost for working families’ bottom lines.

Parents are also seeing greater relief. The Working Families Tax Cuts lower the high cost of raising a family by expanding key pro-family tax provisions. The Child Tax Credit was permanently doubled and will grow with inflation. Trump Accounts will provide new savings opportunities for newborns, and the adoption tax credit was expanded. The child and dependent care tax credit and employer-provided childcare credit were also expanded, helping make affordable childcare more accessible.  

In our community, the commonwealth, and across the nation, small businesses are the engine of our economy. This year, nearly twelve million small business owners are seeing an average tax reduction of nearly $7,000, while the now permanent extension of the 20-percent small business deduction (Section 199A) is delivering $4,600 in average relief to eight million entrepreneurs. 

I was the sponsor of the Main Street Tax Certainty Act, signed into law as part of the Working Families Tax Cuts, which made the small business deduction a permanent part of our nation’s tax code. This key provision ensures small businesses can grow, create jobs, and invest in their communities. Small businesses account for nearly 95 percent of employers across the district, and many have shared how this deduction helps them invest in employee wages and benefits, expand facilities, and grow their business. When small businesses thrive on Main Street, our communities thrive. 

Restoring immediate deductibility for research and development expenses is also unlocking capital for tens of thousands of small businesses. Allowing businesses to deduct investments in capital expenditures like equipment, new factories, and factory improvements is spurring incredible investment in new manufacturing. 

Taken together, these policies deliver real, measurable results for families and small businesses across Pennsylvania. They reflect a simple principle: when Americans keep more of what they earn, they are better able to support their families, invest in their communities, and plan for the future. 

Across Pennsylvania and the country these results are already being felt. Conversations about this year’s historic refunds are happening at kitchen tables and in workplaces across the country, as families are more empowered when deciding how to spend, save, or invest that money.

These results show what’s possible when we have a tax code that supports working families and allows them to keep more of what they earn — and we should continue building on that success.

United States Representative Lloyd Smucker serves Pennsylvania’s Eleventh Congressional District, including Lancaster County and southern York County. He serves as vice chair of the House Budget Committee and is a member of the tax-writing House Ways and Means Committee.