Rejoice, all ye faithful! Tax Reform has passed the Senate and the American people will be getting more of their money back. Hallelujah!
What’s good about it? American Commitment’s Phil Kerpen shares all the ways the bill will make America great:
Tax reform will provide a strong direct boost to take home pay. The standard deduction jumps from $13,000 to $24,000 for a married couple and from $6,500 to $12,000 for a single filer. Above the much more generous deduction amount, the 15 percent rate is cut to 12 percent, all the way up to $77,400 for married couples and $38,700 for singles. The rest of the rates are also cut, providing tax cuts at every income level while making the overall tax system more progressive: the share of all federal income taxes paid by millionaires is expected to increase from 19.3 percent to 19.8 percent.
The bill doubles the child credit to $2,000 per child, including up to $1,400 per child for non-income taxpayers. The credit phases out above $400,000 in income, making it available to nearly everyone.
And that’s not all:
The new provisions are expected to be implemented in time to show up in February paychecks, and you should fill out a new W-4 form as soon as the IRS makes it available to make sure your adjusted withholding is accurate.
Perhaps even more significant for many families is the impact of the bill’s business tax cuts on wage growth. The U.S. has been uncompetitive internationally, with the highest corporate tax rate in the world and a perverse system that penalizes companies for bringing home the profits of their foreign subsidiaries. An analysis by Council of Economic Advisers Chairman Kevin Hassett finds that fixing these problems will raise household incomes $4,000 to $9,000, with around two-thirds of the benefits of business tax reform flowing to labor.
Could this bill get better? Yes, it could. The reforms also include gutting Obamacare by repealing the individual mandate. The thing is, most people who chose the penalty were low income workers. Rather than paying the penalty to avoid pricey Obamacare, they could actually buy cheap, emergency coverage insurance instead of paying the penalty–a tax. This would benefit those who need it most rather than penalizing them for, essentially, being poor. That the Democrats were all for this provision once Obama was out of office demonstrates how awful it was for struggling people. It also demonstrates their cynicism. They didn’t mind the working poor suffering under their bill when Republicans were in charge. They didn’t want to live with the consequences of their own evil plans.
Between Obamacare, environmental regulation, the IRS investigating ideological enemies, and oppressive taxation, the Obama administration kept a boot on the struggling American economy. This bill changes all that.
Tax reform is a breath of fresh air blowing through the American economy. Companies and individuals can inhale and exhale freely and grow their wealth their way. Businesses will come back to America. Americans will have more jobs. Americans will make higher wages. Americans will keep more of their money to spend as they please.
A Christmas gift, indeed.
Photo credit: Keith Allison, Flickr, Creative Commons