News / Economic Divide

US tax bill: To benefit the rich only?

Wednesday, 17 January 2018 10:22 AM [ Last Update: Wednesday, 17 January 2018 10:22 AM ]

US tax bill

In early December, US Senate Republicans passed a dramatic overhaul of the US tax system; a big step toward delivering the first major legislative victory for US President Donald Trump.

Republican leaders praised the plan as the biggest rewrite of the nation's tax laws in more than 30 years. However, on the other side of the aisle, Democrats slammed the bill, saying it was unfairly tilted in favor of big companies and rich people – a huge tax cut for the 1 percent. Trump himself attempted to sell the bill as a "Christmas present" for middle class Americans. The richest 1% of US taxpayers receive a larger share of the tax cut in 2018 than the pay in federal taxes.

It is an understatement to say that businessman Trump gave corporations a gift that would keep on giving at least until Trump is in office. The “Tax Cuts and Jobs Act,” is expected to push many American enterprises closer to a tax rate cut from 35 percent to 20 percent. The White House hopes the reduction can raise the domestic GDP growth rate up by three percent, which may help make up for the cost of the tax cut. However, many in the know cast doubt on the GOP prediction that the measure will expand the economy and create new jobs. The Joint Committee on Taxation reported that any economic increases triggered by the reform does not offset revenue losses.

The tax cuts is estimated to bring the government $1.5 trillion less revenue for the next 10 years. That’s' while, the government needs more revenue because millions of more Americans retire each year to go on Social Security and Medicare.

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