Question

Please identify and share your analysis of The Tax Cuts and Jobs Act and the 2020 Coronavirus Relief Law (CARES Act). How does each propose to stimulate the economy? What are the key provisions for taxpayers, small businesses, and corporations? How does each propose to benefit those living at or below the Federal Poverty line? Last, are there any new proposals or additions to either, since March 27, 2020, to stabilize the USA economy?

Answer 1

The Tax Cut and Job Act ( TCJA) made changes to corporate income tax and individuals income. The TCJA reduced tax rates on both business and individual income, and increase incentive for investment by firms. The Coranavirus Aid , Relief and Economic Security Act ( CARES Act) is $ 2.2 trillions economic stimulus bill passed by 116th U.S Congress and signed by President Trump in March , 2020 in response to economic fallout of covid-19 pandemic in U.S.

The TCJA has lower the tax liability and higher output which will boost taxpayers income. Most of analysts and observer expected the tax Cut and Job Act to boost economic output in short as well as in long run. The TCJA cut to a corporate tax rates. So far TCJA has encourage economy by increasing demand for goods and services. CARES Act is aimed to providing relief for individual and businesses that have been badly affected by pandemic. CARES Act stimulates economy by providing $500 billion in tax relief for businesses of all sizes. CARES also provide $350 billions in small businesses loan for companies with under 500 employees. CARES provide about $500 billion for hospital and health cares providers to support our hospital. Direct payment, payroll taxes , direct payment are some provision include in CARES Act.

Key provisions for taxpayers , small businesses and corporation- For taxpayers Direct cash payment to eligible individual as a credit against thier income tax liability 2020. $1200 for single individual and $2400 for married individuals fillings IT jointly. For Small businesses- CARES provide $500 billion in immediate tax relief for all sizes of businesses include payroll tax and direct payment etc. CARES provides $350 billion in small business loan for companies and other 500 employees. Paycheck Protection Program (PPP) Loans for Small businesses which authorise $349 billion worth 100% SBA guarantee loan covering medical leave, payroll cost etc. For Corporation- payroll tax credit for employers who hold on the employee during pandemic will be eligible for refundable payroll tax credit fir 50% of wages paid by employers.

There are various provision that proposed to benefit those living at or below the poverty line. The CARES Act include important provisions to mitigate the loss of people living at fedearl poverty line:- direct payments to low and middle-income families of $1200 for most adults and $5000 for children under age of 17. A sizable expansion of unemployment benefit for next four months. Expanded unemployment insurance for people affected by Pandemic.

The coronavirus aid, relief and economic security act (CARES) bill passed by US Congress and signed by President Donald Trump on March 27 2020 in response to economic fall out of covid-19 pandemic in US. Since then government are taking all possible measures to limit the human cost and economic distruption.So far government have been dealing primarily with urgent medical care and economic issues. Government providing fast and direct economic assistance to workers, families and small businesses.