One of President Trump’s biggest legislative victory is the recent passing of the Tax Cuts and Jobs Act.
According to BBC, the$1.5 trillion tax bill was passed after hours of debates, 51-49 votes, after a series of amendments.
This tax bill includes a sharp cut in corporation taxes, with the corporate tax rate dropping from 35 percent to 21 percent this year . This would mean that big corporations like Apple, Amazon, Google and Facebook would be getting a big tax break.
According to CNN, the plan is expected to cut funding by $5 trillion over the next decade, with senior citizens, the poor and the disabled suffering the most.
Some middle- and lower-class individuals feel they will end up suffering the most, while big corporations pocket more money.
“This tax cut is going to make it harder for my parents to get Medicare or Medicaid and I’m going to have to help support them, plus support myself, which means more hours and another job for me,” Kyler Willis, Giant Food Stores employee, said.
On the other hand, some students expect the tax plan to benefit them as well.
“His tax cut will benefit all Americans and that’s coming from someone who grew up poor,” Philip Mancuso, political science major at Cabrini University, said. “It affects me, because it will give my mother more money in her pocket. I do believe it’s a good thing— a very good thing.”
The plan will ultimately help businesses more than people, because corporate tax cuts are permanent and the individual tax cuts for people are not permanent.
Recently, the Joint Committee on Taxation conducted an analysis of different household incomes ranges and revealed whether they would have an increase or decrease in the amount of taxes paid.
According to the analysis, “The vast majority of those making under $10,000 a year— 96 percent— would see a minimal change (no more than $100 in either directions) in their tax bill by 2019.”
The analysis also showed that more than 90 percent of households with an annual income between $500,000 and one million would see a tax cut of $500 or more.
The plan will ultimately cut income tax rates, double the standard deduction and eliminate personal exemptions.
Steven M. Rosenthal, a senior fellow at the nonpartisan Tax Policy Center, said, “Trump will make out like a bandit on all the big items.”
The Tax Cuts and Jobs Act of 2017 represents the most significant changes in tax law in over 30 years! When was the last time your CPA or tax preparer offered you tax strategies to help you be more prosperous in your business? Give us a call today at 636-394-5524 and let us help guide you through the complexities of these new rules.