In 1986, the Huskers played in the Big 8, compact discs were the wave of the future and "Top Gun" and "Crocodile Dundee" showed on the silver screen. That was also the last time Congress comprehensively reformed the tax code. Everyone knows our economy and the world look much different three decades later.
The tax code needs to be modernized, and over the past six years, the Senate Finance Committee has held 70 hearings, produced 10 research reports and created five bipartisan panels outlining the best way to move forward. Throughout this process I have maintained three goals for reform: giving relief to the middle class, enhancing small business growth and allowing our country to be more competitive globally. The bill recently passed by the Senate does all three.
Many American families have struggled over the past decade. Wages for workers have flatlined. We're only beginning to see a turnaround. Putting more money back into the pockets of regular Americans serves as the best way to continue this momentum. The Senate tax reform bill achieves this by nearly doubling the standard deduction and protecting the first $24,000 married couples earn, and the first $12,000 individuals earn, from federal taxes.
The Senate also doubled the child tax credit from $1,000 to $2,000 per child. This credit helps families all across our country by providing more money for parents to take care of their children. Promoting family is the best way to support stronger communities.
This legislation preserves deductions that have been proven to work. This includes the charitable deduction, medical expense deduction, student-loan interest deduction, mortgage-interest deduction and low-income housing tax credit. It also allows for a state and local property tax deduction of up to $10,000 on federal taxes and maintains popular savings programs, such as 401(k)s and individual retirement accounts, empowering Americans to plan ahead.
The Senate tax reform keeps nearly all current education incentives for students and teachers. We retained the Hope Credit, and saved the Coverdell and 529 education savings accounts. All of these programs promote saving for school and help prepare parents for future tuition. Finally, we double the educator deduction, which helps teachers make their classrooms as friendly for learning as possible.
Moreover, although some have argued the Senate plans to tax tuition waivers graduate students receive, there is no such provision in the legislation passed by the Senate. Ph.D. research acts as an important part of higher education and drives our nation's innovation. This is a bill that acknowledges education as key to our country's success in the future.
Small businesses also gain from reform. Lincoln and Omaha have grown into bustling hubs of innovation, and this bill helps them and other innovative communities throughout Nebraska continue to prosper. The Senate bill provides a 23 percent deduction for most small businesses, which will lower their tax bills and give them more financial flexibility. The Senate also preserved the 1031 like-kind exchanges and stepped-up basis that further help our small businesses.
Lastly, this legislation goes a long way toward making the United States competitive internationally. America currently taxes corporations at a rate 13 percentage points higher than that of our competitors from the developed world on average. This has played a significant role in why companies have chosen to set up their headquarters or invest outside of America. The Senate tax reform legislation puts us in line with our trading partners, which will lead to more jobs and higher wages for workers in our country.
Overall, this bill accomplishes three critical objectives: it gives relief for middle-class families, promotes small business growth and makes America’s corporations competitive globally. I’m pleased to see this comprehensive, pro-growth bill clear the Senate. I’m hopeful the first tax reform bill in 31 years will soon reach the president’s desk.