The House passed a new tax bill on December 20th, causing a lot of uproar and anger for many. But what exactly is in this tax bill, and what does it mean for you?
The most controversial aspect of this bill is the large tax cut for corporations. While there are some tax cuts for small businesses, the majority of the cuts will go to large corporations. This huge tax cut will cause the United States to lose an estimated $1.5 trillion in tax revenue during the next 10 years, which many economists say we will not be able to earn back in increased economic activity.
As for the individual, each person will experience different results. The bill will temporarily lower taxes for people while raising the standard deduction, or the portion of income that is not subject to tax. However, the bill also removes some tax deductions and reduces the amount of state and local taxes that a person can deduct from their federal tax returns.
If you are in the 1 percent, meaning that you make more than $732,800 per year, you will receive approximately 20.5 percent of the benefits in the tax bill starting next year.
91 percent of the middle class, those making between $48,600 and $86,100, will receive a tax cut around $1,090, and 7 percent of the middle class will see a tax increase of $910.
As far as healthcare goes, many people will be in serious trouble. With the repeal of the healthcare mandate, people are no longer required to have health insurance, which will weaken the Obamacare infrastructure that covers more than 12 million people, leaving over four million people uninsured. This will raise premiums for insured people by 10 percent in the next 10 years.
On the bright side, many tax provisions that could negatively affect students haven't been touched under the bill. Tuition waivers still exist, employer tuition assistance is still non-taxable, and student loan interest deduction hasn't been altered.
Overall, unmarried young people without children won't experience any huge tax increases over the next few years and won't lose most of the benefits provided for many young people. However, they also won't see a huge tax decrease.
This tax cut will help a lot of middle-class families, at least temporarily, but it will also hurt a lot of people who relied on the old bill for healthcare. If you're safely in the middle class, you'll probably see some tax cuts for the next few years, but they won't be permanent.
