Question

Write a summary of the new tax plan

Answer 1

The new tax plan under trump was formulated in december 2017 reducing corporate tax from 35 to 21% , income tax has come down which means an over all income tax rates, low rates clearly means a rise in inflation . Incomes go up and so does the output /productivity. More saving reduces interest rate making house loan cheaper but could threaten to be another asset price bubble based on credit usage. State tax exemption has increased for couples with high credit for child care , subject it to a territoty / state based tax system. Businesses are prone to grow so they are reinvesting money back into the country , high income groups benefit the most saving highly now which means more burden on the low income making ones.But the fault is to bourne in the long run which increases government debt because it is directly affecting middle income who spend the money more out of their pockets. Thus it clearly is inequal in distribution in income distribution and might increase the gap even more ,but run the cycle of demand to increase more output and produce more jobs eventually.