The version of the Tax Reform bill that eventually passed the Senate, after numerous back-and-forth between the House, and the Parliamentarian finally passed with a slim GOP victory of 51-48. After that, the legislation was quickly affirmed in the House, by 224-221. It now awaits President Trump’s signature.
The Final version of the tax reform bill that passed was slightly changed from the previous version in a few key ways. The it contains the same seven individual tax bracket, but the rates are now reduced further, down to 10, 12, 22, 24, 32, 35 and 37. Furthermore, the Child Tax Credit was increased from $1000 to $2000 single parents while the married couples with children have had their deduction doubled.
The tax bill brought the corporate tax rate down to 21% from 35%, while eliminating the individual mandate for Obamacare. Now, individuals can choose to go without healthcare without being harassed by the IRS.
Paul Ryan, the Speaker of the House explains that a family of four earnings of $37,000 is to see a tax cut of approximately $2,509, because of the new tax reform.
He said, “The Tax Cuts and Jobs Act will put Americans back on top, with a new tax system designed to give a boost to American businesses big and small. The corporate tax rate will drop from 35%—the highest in the industrialized world—to 21%—America’s lowest rate since 1940.”
Further, he said, “When companies invest in the United States, the demand for workers increases, which in turn drives up wages for individuals and families. By lowering taxes across the board, eliminating costly special-interest tax breaks, and modernizing our international tax system, the Tax Cuts and Jobs Act will help create more jobs, increase paychecks, and make the tax code simpler and fairer for Americans of all walks of life.”
Other aspects of the Act for individuals in the final version of the Tax Cuts and Job Act are inclusive of a clause that allows all the individuals to simply write-off the state and local taxes amounting up to $10,000. This helps reduce the mortgage interest, medical expense, and extends charitable deduction.
The Tax Foundation analyzed the final version of tax reforms and is of the opinion that the legislation may cause GDP to rise by 1.7%, increase the wages by 1.5% while adding 339,000 new jobs to the economy.