Trump presidency dropped a bombshell on Americans when they announced their tax reform plan. The plan was signed by President Trump on 22nd December 2017 and became a talking point since amongst the Americans, supporters and non-supporters alike.
The opinion of the general public on this reform totally highlight their stance on this presidency, as the 1.5 trillion dollars overhaul of tax money was passed barely by the Senate. When the Senate voted, the bill barely made it to majority, with 51 party-line votes for yes and 49 for a no. That being said, the bill was passed later in the House by a respectable difference, with 224 votes in favor and 201 in against.
The changes the tax reform brings mainly depend on a person’s income and what state he/she/they reside in. For an average income human or family that earns a median income, the tax reform is said to save them around $2000. But the same isn’t the case if you’re living in a high tax state, as the taxes will most likely go higher on properties.
For wealthy people, banks and companies though, it’s a completely different story. This bill was mainly passed for rich people, corporations, banks and big companies to give them a huge tax cut. As can be seen from the bill and its regulations, investment income, profits in corporate, estate taxes and much more saw very significant tax cuts. And all of the financial service companies, mainly banks stand in a very happy spot too, as they get a preferential tax treatment, with many banks claiming that their tax rates will go lower than 20%.
This tax reform will last till at least 2025, with experts saying that it may increase the deficit by hundreds of billions of dollars, with some claiming it may even reach a figure of 2 trillion dollars by the end of it. This is majorly due to the permanent Tax cut in corporate taxes and temporary cut in individual taxes for the wealthy and big corporations.
The current structure of the income tax brackets for individuals is mainly unchanged than the previous ones, other than the marginal rates going down a couple percents in most of the brackets. These changes have gone into effect from this year and will last at till at least 2025.
One more thing this tax reform does is cancel any tax penalties that came with the Affordable Care Act for people who did not obtain their coverage for health insurance. The tax penalty is still there, but just for its name as from 2019, this tax penalty will just amount to $0. This may lead to as much as 13 million people losing their insurance till 2025. This will end up pushing the premiums up by over 10% by the end of this period.
All in all, the tax reform Trump has bestowed on America may have some highs, but there are a lot of things in this reform that will cost some heavy money to America’s pockets, only increasing their already massive deficit and bringing down their economy in the process.