Published by The Daily Signal
Written by Rachel Greszler
With lawmakers poised to pass the Tax Cuts and Jobs Act—a sweeping tax reform package—many individuals and families will see very different tax bills come 2018 and beyond. In general, an overwhelming majority of Americans’ will pay less in federal taxes.
So how will you fare under the GOP tax plan?
Well, on net, most Americans will see a significant tax cut, including virtually all lower- and middle-income workers and a majority of upper-income earners.
The Tax Cuts and Jobs Act will, on average, provide immediate tax cuts across all income groups, according to analysis from Congress’ Joint Committee on Taxation.
This analysis does not, however, show how those tax cuts would vary based on factors such as total income, type of income, number of children, and itemized deductions.
Among the new tax law’s most beneficial components is a significant reductions in business tax rates. This will help make America more competitive with the rest of the world, and will result in more and better jobs as well as higher incomes for American workers. The Act will also put more money back into the paychecks and pockets of most Americans.
The new tax law does lack some important pro-growth and simplification components, however. It does not go far enough in eliminating deductions and loopholes or in reducing the top marginal tax rate. It adds a discrepancy between the top rate for individual versus pass-through and small businesses and adds some complicated business provisions. It also fails to eliminate the Alternative Minimum Tax and it phases out and eliminates some tax cuts for budgetary reasons.
To get a better idea of how some workers, families, and small businesses will fare under the new tax code, The Heritage Foundation has estimated the tax bills of a range of taxpayers under current tax law and under the GOP’s final version of the Tax Cuts and Jobs Act.
Tom Wong: Single teacher with median earnings of $50,000 per year. Under the current tax code, Tom pays $5,474 each year in federal income taxes. His tax bill will decline by $1,104, or 20 percent, to $4,370 under the new law.
See the full story here.
December 20, 2017
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