Last year, we overhauled the tax code for the first time since Ronald Reagan was president. With the passage of these historic tax cuts, the average South Dakota family of four will see their after-tax income rise by $2,400. We doubled the Child Tax Credit to $2,000 per child. We eliminated the marriage penalty. Pro-growth reforms are producing higher wages and lowering utility bills. As a result, the job market is booming, middle-class income is at an all-time high, unemployment is the lowest it’s been in 49 years, and wages are steadily growing.

These tax cuts changed the trajectory of our economy, but we’re not stopping there. In early September, my committee approved new tax relief legislation we’re calling Tax Reform 2.0 – a three-pronged package of bills that will lock in the tax cuts for families and small businesses, make it easier for families to save more for retirement, and promote innovation for startup businesses. How?

First, Tax Reform 2.0 makes permanent tax cuts for middle-class families, small businesses, and family farmers and ranchers. In the first round of tax reform, we made sure the first $24,000 a couple makes is tax free. We also doubled Death Tax exemption levels and offered a 20 percent small business tax exemption (which applies to many family businesses in South Dakota). This new wave of tax reform makes certain these provisions are permanent, providing much-needed stability and certainty for families and small businesses, giving them more freedom to spend their money as they choose.

That’s important because this is a significant savings for families. Consider a couple with two children. Both parents teach and make the average salary for a South Dakota educator. Their savings? $2,600 – or nearly 1,000 gallons of milk. The savings is due in large part to the doubling of both the Standard Deduction and Child Tax Credit.

Next, the new tax relief legislation helps families save for retirement by helping local businesses provide retirement plans to their workers. At the same time, we’re taking steps to expand education savings accounts by giving families flexibility to use the funds to pay for apprenticeships or cover the cost of homeschooling. I’m hopeful this will allow families to plan for the future while providing financial stability for today.

Maybe think about it in this context: Jon and Jennifer have been putting money into a 529 Education Savings Account for years. Now, their daughter, Julia, is in middle school, and they’ve decided to homeschool her. Because of Tax Reform 2.0, they’d be able to use those 529 savings to cover the cost of curriculum – penalty free.

Finally, this legislation will promote entrepreneurship by allowing start-up businesses to write off more of their initial start-up costs. I’m hoping this will help more South Dakotans ride the tidal wave of growth we’ve seen in recent months.

While no tax plan will be perfect in everyone’s eyes, I’m optimistic about the impact this package could have on South Dakotans. Our tax code should support people, not punish them. By creating sustainability, incentivizing innovation, and expanding savings opportunities, we can take another step toward forming a growth-oriented tax code for the next generation.

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