|Senate Passes Historic Tax Cuts Bill|
|keywords: Changes in Tax Brackets Republican senators Child Tax Credit|
In what could be considered great news for many Americans, the Senate has successfully passed the Tax Cuts and Jobs Act. The Act was passed 51-49, with just one Republican – Bob Corker (R-TN) – voting against it.
A number of last minute changes had to be made and a few Republican senators, who were not satisfied with the version of the bill, had to be convinced, but in the end the Republicans managed to secure a major legislative win on Saturday.
Details of the Bill
Changes in Tax Brackets
The Senate bill retains the seven tax brackets that are in the current income tax law. It has, however, reduced the tax rates for individuals as well as businesses. The lowest tax rate remains at 10%, but the rest of the brackets have been reduced from 15% to 12%, 25% to 22%, 28% to 24%, 33% to 32%, and 39.6% to 38.5%.
The bill has also radically changed the threshold at which the highest tax rate kicks in. Currently, an annual income of $418,000 for an individual and $480,000 for a couple will be taxed at 39.6%. The bill has changed it to $500,000 for an individual and $1,000,000 for couples.
Impetus to Businesses
Christmas has come early for large businesses as corporate tax rate has been reduced from 35% to a mere 20% which means billions of dollars, perhaps even a couple trillion, is going to be pouring back into America which is terrific on so many levels. Small and medium business owners also have much to rejoice, as the bill allows them to fully deduct their business expenses, which is not the case currently. Right now, there is a 50% cap on business expenses deduction, which has been removed by the bill.
Child Tax Credit
Child tax credit has been increased sharply from the current rate of $1,000 per child to $2,000 per child. It demonstrates the GOP’s commitment to offering incentives for families, which are the backbone of our society.
The bill has nearly doubled the standard deduction – from the current rate of $6,350 for an individual and $12,700 for a couple to $12,000 for an individual and $24,000 for a couple. Similarly, exemption for estate tax has also been doubled from the current rate of $5.49 million for an individual and $10.98 million for a couple to $11 million for an individual and $22 million for a couple.
What Needs To Be Done Now
Back in November, the House passed a slightly different version of the Tax Cuts and Jobs Act. Now that the Senate has done so too, the members need to meet, sort out the differences between the two bills, and come up with a final, unified version of the bill. Once it gets passed in the House and Senate, it will be sent to Trump, who will then sign it into law.
Joy for American Workers
This is, without a doubt, a joyous occasion for American workers, as they stand to benefit greatly from the tax changes the coming years. They will be able to save more, invest more, and improve their financial position in the long term greatly. It will also offer a much-needed impetus to our businesses, which are recovering from the effects of the great recession under Barrack Hussein Obama, Barney Frank, and Alan Greenspan. On the whole, it is a great victory not just for Trump and the GOP, but the American people as well!
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