It’s been a long time since there was any significant change to the way taxes are assessed In the United States. With no real working plan to replace Obamacare, President Trump has moved onto the next item on his agenda, reforming the tax code. The President promises to slash taxes for the middle class with the most sweeping changes to the federal tax code in decades.
But many are skeptical of the plan, siting that the cost of such drastic changes has not been adequately addressed and there are few details about how working people would benefit from the proposal. The plan as explained by the President is focused on helping the working class but so far has only demonstrated substantial rewards for wealthy people and corporations, including the elimination of taxes on large inheritances and deep reductions in the rates paid by businesses large and small.
There are skeptics but there are also those who are seeing a positive spin to the proposed plan. The plan aims to simplify and cut taxes for the middle class by doubling the standard deduction to $12,000 for individuals and $24,000 for married couples filing jointly. Increasing the standard deduction would reduce the need for itemizing taxes in order to claim various credits and deductions thereby simplifying the process. There is also an increase to the child tax credit, though the amount hasn’t yet been specified.
So, who does the new proposed plan help the most, the rich, or the middle class? The information provided so far has made it difficult to determine the answer to that question with any certainty. Republicans have long believed that helping out the rich has the effect of creating more jobs and increasing pay which eventually leads to more prosperity for all.
Enacting this plan is by no means a slam dunk, there are plenty of debates that are still to be had, and there are many questions that will have to be answered before that happens.