Question

So far, has the president's revision of America's tax system having a positive/negative impact on the U.S economy? Please make substantive comments.

Please answer ASAP!

Answer 1

US president Donald Trump is initiating a series of reforms measures to boost US economy. One of such reforms is Tax cuts and Jobs Act that came into force since December 22, 2017. Now the big question is that how the tax incentives of Trump administration is going to affect the Americans. According to the new tax reforms, the new tax rates are 10%, 12%,22%, 24%, 33%, 35% and 37%. People having income in the range $0-$82,500 will have to pay maximum 22% of tax and therefore, it is going to not impact very much the middle income group. The corporates and rich family groups are taxed at 37% There are separate tax incentives for married couples and they are required to file separate income tax returns from spouse.

The proposed tax rates is obviously going to discriminate the married couples and singles. For example, single having income $30,000 will pay 12% income tax whereas the married couple having same income will pay 10% income tax. The new tax regime is obviously going to boost savings of married couples instead of singles.It will also benefits rich more than the middle income people. Earlier the rich people and corporates were paying 39.6% income tax and now they will have to pay maximum 37% income tax. The Trump administration kept two of the earlier tax rates unchanged i.e., 10% and 35%. Under the new tax regime, the tax savings for investment in charitable institutions, retirement bonds and student education continues. However, the biggest disappointment from the new tax rule is for housing sectors as it allows deductions on interest of only $750,000 mortgage loan amount. The Child tax incentive is enhanced from $1000 to $2000. Parents who do not earn sufficient income now can avail tax credit up to $1400 under new tax administration. To sum up, the new tax rule is obviously going to benefits a large US population.