OPINION:
A new year ushers in a fresh start for many. Goals are renewed, finances are reprioritized and plans are set. This year, that included a refreshed tax code based on the idea that hardworking Americans should keep more of what they earn.
As the tax filing season begins, Americans are seeing how the Working Families Tax Cuts law is providing across-the-board tax relief that promises bigger paychecks and more opportunities to get ahead.
The Working Families Tax Cuts prevented the largest tax hike in history and permanently restored key pro-growth tax provisions already driving domestic investment and economic growth. Tax rates have been lowered permanently.
The standard deduction, which significantly simplifies tax filing for the approximately 90% of taxpayers who claim it, has been permanently increased. Likewise, the child tax credit was permanently increased to $2,200 per child and is now indexed to inflation.
Families also benefit from new school choice tax credits and enhanced education savings accounts, which help students afford the schools and training programs that best meet their needs.
The new law also fulfills some of President Trump’s signature campaign priorities, such as no taxes on tips and overtime, offering significant relief for the hourly workers who keep our communities running. Seniors are receiving new tax relief through a $6,000 bonus deduction. Health savings accounts were expanded, enabling taxpayers to save more of their money tax-free for health care expenses, while the work to address the root causes of the explosive increase in health care costs continues.
Additionally, the law creates tax-advantaged savings accounts for children, which will help our sons, daughters and grandchildren build financial security.
The Treasury Department forecasts that the legislation will result in $7,200 in higher wages per American worker and a $3,750 average tax cut per filer in 2026. Overall, the department expects $100 billion more in total tax refunds in 2026 for American families, and, as Treasury Secretary Scott Bessent noted, “For millions of families, such savings are the difference between making a mortgage payment, buying a car or sending a child to college.”
The Working Families Tax Cuts’ permanent pro-growth policies also help small businesses hire, invest and innovate. The 20% small business deduction, now permanent, will enable job creation and spur local economic activity. Permanent full expensing for new capital investment will boost domestic production.
More generous interest deductibility was restored and made permanent, which will help finance critical investments. The death tax exemption was increased and made permanent, which will spare family farms, ranches and small businesses from that undue burden when they lose a loved one.
These new business incentives are already bearing fruit. In Rupert, Idaho, Pipeline Plastics opened a new manufacturing facility employing more than 50 people, thanks to the permanent extension of the new markets tax credit. Similar projects are popping up across America, with many more to come.
With its new tax relief for working families and seniors, low‑ and middle‑income individuals are the biggest winners under this bill. Permanently lower federal tax rates and pro-growth policies provide Americans with the confidence they need to innovate, grow businesses and plan for the future. Taken together, these changes are building an economy that works for working Americans.
• Mike Crapo is the senior U.S. senator for Idaho. A Republican, Mr. Crapo is the chairman of the Senate Finance Committee, which has jurisdiction over federal tax policy, federal social safety net and health care programs and the implementation of foreign trade agreements.
Correction: A previous version of this piece gave the incorrect estimated amount in tax refunds projected by the Treasury Department this year.
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