#TrumpTaxCuts The Trump Tax Cuts, officially known as the Tax Cuts and Jobs Act (TCJA), were enacted in 2017 and significantly altered the US tax code. Here are some key aspects:
Key Provisions
- *Individual Income Tax*: Reduced tax rates for individuals, with new brackets ranging from 10% to 24%, 32%, 35%, and 37%.
- *Standard Deduction*: Increased the standard deduction, making it more beneficial for fewer taxpayers to itemize deductions.
- *State and Local Tax (SALT) Deduction*: Limited SALT deductions to $10,000.
- *Corporate Tax Rate*: Reduced the corporate tax rate from 35% to 21%.
- *Estate Tax Exemption*: Doubled the estate tax exemption.
Impact
- *Economic Growth*: Studies show the TCJA led to an estimated 11% increase in corporate investment, but its effects on economic growth and median wages were smaller than expected.
- *Federal Debt*: Extending the expiring provisions is estimated to add $4.6 trillion in deficits over 10 years.
- *Tax Burden*: After-tax incomes increased disproportionately for the most affluent.
Expiration and Potential Changes
- *Expiration Date*: Many individual tax cuts are set to expire in 2025, while business tax cuts expire in 2028.
- *Proposed Extensions*: President Trump has called for permanent extension of the TCJA and additional policies, such as no taxes on tips and Social Security benefits for retirees.
- *New Tariffs*: Trump has also proposed new tariffs, which could offset the economic benefits of tax cuts.