Question

The new tax plan

required: list all the pros and the cons

Answer 1

Pros

• New tax slabs with fewer slabs than earlier 7
• The new standard deduction goes up to $12,000 for individuals and $24,000 for married couples.
• The new tax plan increases the child tax credit to $1,600, and increases the phaseouts to $115,000 for individuals and $230,000 for married couples.
• Elimination of the Alternative Minimum Taxes (AMT)
• Tax breaks would induce companies to invest in America again
• Lower tax would result in higher hiring and pay

Cons

• The new tax proposal no longer allows to deduct state and local income taxes, significantly hurting the middle class in states with high tax rate
• Currently, homeowners can deduct their mortgage interest on loans up to $1 million. New tax laws lower the cap on mortgage interest to $500,000. Using a 20% down payment rule as an example, this will impact purchases over $625K.
• It is argued that it will increase the deficit
• The new law is considered as wildly complicated