It’s been 31 years since our nation enacted tax reform. Today, December 22, 2017, is a day sure to be remembered in America’s economic chronology. This law, similar to the Affordable Care Act, was passed along party lines. The “Tax Cuts and Jobs Act (TCJA)” is property of the Republican Party without any Democratic support whatsoever. The opposition proclaimed that the law was constructed in haste and poorly vetted. Proponents for tax reform claim that they’ve had a tax reform blue print ready to go for over a decade. The ayes have it: TCJA is law. In 2018, taxation on individuals and businesses will be notably different. So, who are the winners and losers?
According to the Nonpartisan Think Tank, “Tax Foundation,” the middle class will receive a double-digit discount in their tax obligation. For individuals earning less than $200k a year, their savings can add up to several thousand dollars. Instead of paying out extra funds, workers are keeping them. And who doesn’t want extra money?
The chart below runs the numbers for a single-filer earning $50,000 in adjusted gross income. Married-filers without dependents can double these figures as a gauge for their tax situation up to $100k. The figures speak for themselves: single-filers earning $50k will save an average of $1,596.25. For Starbucks customers, that adds up to a latté, every day of the year. For the savings-minded, investing $1,596.25 each year at 6% compounded for the next 10 years grows to $25,160.88. Now that’s what I call tax reform!