Tax Cuts and Jobs Act
By: Mary Bethany Barkell
President Trump’s new tax reforms are the biggest since Ronald Reagan‘s Tax Reform Act of
1986. It will affect nearly every American in every income level and cover all aspects of our economy.
“Republicans and Democrats came together to cut taxes for hardworking families in 1981, and again in
1986 to simplify the tax code so that everyone could get a fair shake. The rest, as they say, is history.”
(“President Donald J. Trump: “With tax reform, we can make it morning in America again.” The White
House, The United States Government, 23 Oct. 2017, www.whitehouse.gov/the-press-
office/2017/10/22/president-donald-j-trump-tax-reform-we-can-make-it-morning-america-again.)
i
These tax breaks were successful then. If President Trump’s proposed tax plan passes we will see
whether it does the same for our economy.
There are two distinct parts of the proposed reform. The first is on the individual tax structure
and the second on the corporate tax structure. Here are some tax reforms that are recommended for
the individual. These are the ones that stand out the most to me. As it now stands, there are seven tax
brackets. They are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. Under the new tax bill, there would only
be four tax brackets. They are 12%, 25%, 35% and 39.6%. The 25% tax bracket would start with earners
who bring in $45,000 and $90,000 for married couples. The 35% tax bracket would apply to families
whose income exceeds $260,000 and individuals who earn $200,000. The 39.6% tax bracket would go
up to those who earn $500,000 or more for individual and families who earn more than 1 million dollars.
Alan Fram and Andrew Taylor, Associated Press. “GOP tax bill would be broadest tax code rewrite in 30
years.”
ii
Significant increase the standard deduction for child tax credit is proposed in the new tax bill.
The standard deductions are $6,350 for individuals and $12,000 for families. With the new tax code
proposed the standard deductions would nearly double to $12,000 for individuals and $24,000 for
families. The bill would repeal personal exemptions for children and other dependents. In their place,
increase the child tax credit $1,000 to$1,500. These deductions would begin to phase out at $75,000 for
individuals and $150,000 for those filing jointly. With these to combine itemized deductions would be
significantly reduced.
iii
James R. Nunns states, “We estimate that 38 million (84 percent) of the 45
million filers who would otherwise itemize in 2017 would opt for the standard deduction.”
iv
In the new tax bill proposed the tax deductions such as charitable contributions, home mortgage
interest, and state and local property tax would be preserved. However, there are new limitations. For
home mortgage interest there is a limitation of interest for $500,000 for a new home. In other words,
