Question

The Tax Cut and Jobs Act, 2017

The changes made by the Tax Cut and Jobs Act, 2017 to the tax provisions have changed tax rate for 2018 and people are getting a first hand experience of what it means to them. Go over the Act and address the questions below:

What are the major changes made to the tax provisions by the Act?

What impact is it likely to have on our GDP and government’s budget?

How have the changes in taxes affected you personally?

Does everyone benefit from the changes in tax provisions or does it favor one group over others?

What changes do you agree and disagree with?

If you had the power to revise the Act, what changes would you make?

Please provide original answers and explain how you came to your conclusion!

Answer 1

The tax cut and jobs act 2017,made many changes to the individual income tax.including reforms to itemized deductions and the alternative minimum tax.,expanded standard deduction , child tax credit,and lower marginal tax rate across brackets.This TCJA lowered tax rate and made individual income tax simple.

The impact of this act will be less on GNP than on GDP as there will be net capital inflows from abroad because of the act, which will be required   to be paid in the future. Again the new act will reduce revenue of the federal government. This will make distribution of income unequal.If this is not financed with other tax increases,this will lead to rise in government debt.

This TCJA lowered tax rate and made individual income tax simple.This act doubled standard deduction to $12,000 for individuals,and $24,000 for married couples in 2018. The TCJA has affected tax payment for all Americans from 2018.TCJA reduce the tax rate and thusdecrease the income tax burden of the Americans.

Tax reform is benefitting millions of Americans.Through lower individual rates and lower rates for businesses, millions of  Americans are gaining from annual tax returns,increased wages, bonuses,stock options and lower utility bills.

The alternative minimum tax for corporations is repealed permanently.Individuals have tax brackets in the new act and so individual tax rate will go down.These are good.The bad is that TCJA is not tax reform in the true manner. The alternative minimum tax for individuals was not repealed even though, for corporations it was repealed.

I would tax old capitaland provide incentives for new investment.Improvement requires simpler tax system and more resources which will help tax payers.