The Tax Cuts and Jobs Act was recently amended and is expected to increase the GDP of the U.S. by a further 1.7 percent, Wages by 1.5 percent and is expected to pour in 339000 full time jobs to the economy of the country, as analyzed by the Tax Foundation.
The legislation, which has now been finalized after all the amendments brought forward by House and Senate, have been introduced to and would be voted this week. The Act now includes the reduction of the Corporate Taxes from 35 to 21 percent, keeping the tax brackets at 7, but decreasing the limits of each rate to 0, 10, 12, 22, 24, 32 and 35 percent. It also increased the Child Tax Credit even more to $2000 from $1000 for singles and married couples.
The bill also removes all the Affordable Care Act’s individual mandate and now requires that the individuals would purchase the health insurance or pay up a penalty to the IRS. These are among the little changes that the Act had to see. The Act as per the Tax Foundation is much closer to the Senate’s version of the House, which had a range of corrections and compromises along with negotiated agreements.
Speaker of the House, Paul Ran said that a family of four with earnings of $73000 expect to see a reduction in tax of at least $2059. He said, “The conference committee took the best ideas from the House and Senate plans and made an even better bill. The Tax Cuts and Jobs Act is now only two votes and a signature away from becoming the law of the land. This is what the American people have been waiting for: more jobs, fairer taxes, and bigger paychecks. We’re in the final stretch—and we’re ready to get this done for the American people by Christmas.”
The Tax Foundation also went on to do a detail and in-depth analysis of the final version of the bill and went on to say that the plan is expected to increase the revenues by almost $600 billion and reduce the overall costs of the bill, that might come with the bill. The bill is further expected to boost the capital stock to a new high of 4.8 percent while its GDP in a longer run would too increase by 1.7 percent, while says that GDP for 2018 might be up to 2.45 percent which is a lot higher than the baseline for growth.
The Report added, “If the entire plan were enacted permanently, it would increase long-run GDP by 4.7 percent, raise wages by 3.3 percent and create 1.6 million new full-time equivalent jobs. However, the long-run cost of the bill would be $2.7 trillion on a static basis.”
This final version also won the support of Karen Kerrigan, the president of the Small Business and Entrepreneurship Council, he said, “The conference report is a solid bill that will enable strong and sustainable economic growth, which is critical to healthy entrepreneurship and small business growth. It is vitally important that this tax package be signed into law this year to fuel the optimism and confidence that is strengthening our economy and bolstering investment, which is key to higher wage growth and more opportunity in areas of the country that have never recovered from the great recession.”
“We appreciate the work of the conference committee, and specifically as it relates to keeping entrepreneurs, their workforce and the dreamers who want to start businesses at the center of tax reform,” she added. “We urge the House and Senate to quickly pass the legislation so it can be signed by President Trump this year.”