Question

Write an introduction of the new tax plan

Answer 1

Economists say that the tax cuts introduced in the new tax plan would stimulate investment and growth. While few say that the new regime would lead to the transfer of wealth from poor to rich. This further would prove out to be a burden for the coming generations and it would be them who will pay for it. Let’s just summarise what all has been introduced or modified in the new tax plan

1. The corporate tax which previously ranged between 15%-35% has been replaced by a single tax rate of 21%, so a major drop in the tax rates for the corporate though the earlier versions of the plan suggested an even lower rate of 20%.
2. Previously, the people were mandated to buy health insurance which now has been eliminated which would raise the tax revenues of the government.
3. Under the individual tax rate which previously ranges from 10% to 39.6% have been modified. Few of them have been reduced and the highest now would be 37%.
4. The standard deductions which previously were allowed have been doubled to $12,000 for individuals and $24,000 for the married couples while a few of the targeted benefits have been removed such as tax preparation costs and moving expenses.
5. The tax credit for children has also been doubled and now available for more families due to increase in income slab.
6. The inheritance amount has now been doubled which is been exempted from the taxes.
7. The multinationals are also at gain. They now would be charged quite low tax rates on their offshore operations which are 8% for illiquid assets while 15.5% for the liquid assets.
8. An important part is that the graduate school tuition waivers are not subject to taxes along with some medical expenses’ deductions.