Business, Finance & Economy

A “Great Christmas Present” or Re-Gift: How the Proposed Tax Bill Affects You

Written by E. Denise Billups

What is the fate of America’s tax system? Many Americans doubt Republican’s impending tax reform and question whether it’s fair to all citizens. In President Trump’s words, the tax reform bill will be “one of the great Christmas presents.” Will it be? Trump recommends cutting taxes for the middle class, making the tax code simpler and fairer for every American, and bringing back jobs and wealth that has left our country. A tax reform, he states, would be pro-growth, pro-jobs, and pro-American. Will such reform level the playing field for middle-class Americans or benefit businesses and the wealthy? Many Americans fear Republicans proposal will eliminate or altogether cut deductions they’ve received for years—mortgage interest, state and local taxes (SALT), 401(k) contributions, student loan interest deduction, and others. Below are salient points of the Republican’s proposed tax plan:

  • Simplify tax brackets from seven to three income brackets
  • Double standard deductions ($12,000 for Individuals and $24,000 for married couples)
  • Lower corporate tax rates from 35 percent to 20 percent which will increase corporate earnings, job growth, and a boon for the stock market
  • Eliminate the death tax (estate tax) which benefits wealthier Americans not middle or lower-income citizens
  • Eliminate the Alternative Minimum Tax (AMT). Again, higher-income families benefit not the middle class
  • Eliminate state and local tax deductions (SALT). Individuals in a high-tax state (Blue states such as California, Connecticut, Illinois, Minnesota, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island, and Wisconsin) will feel the pinch
  • Limit mortgage interest deductions on new homes to $500,000 and property tax deductions to $10,000. This less than real-estate friendly bill will cause many new home buyers to invest in the stock market rather than in real estate
  • Eliminate student loan interest deduction, and
  • Some employer-provided benefits may be  cut

About the author

E. Denise Billups

An author with a rare mixture of Southern and Northern charm, E. Denise Billups was born in Monroeville Alabama and raised in New York City where she currently resides and works in finance. She has an MBA in Finance and she's a prospective Ph.D. candidate. A burgeoning author of fiction, she's published three suspense novels, Kalorama Road, Chasing Victory, By Chance, and two supernatural short stories, The Playground, and Rebound. An avid reader of mystery and suspense novels, she was greatly influenced by authors of that genre. When she's not writing or reading, you can generally find her training for road races and marathons. She's a fitness fanatic who loves physical challenges of all types (running, biking, yoga, dance, and more) a discipline she uses to facilitate the creative writing process.