New tax code gives several breaks to wealthy

By Alex Kerravala, Staff Writer

As of September 27, the Republicans of Congress announced their tax plan that will be voted on. Though the proposed bill is currently nine pages long by the time it reaches a vote it will be significantly longer, perhaps even hundreds of pages long.

Most importantly, this bill provides significant tax cuts on the wealthy; for starters, the income tax on anyone making over $418,000 a year will go down from 39.6 percent to 35 percent.

There is a possibility that Congress will change the level of income that the tax cut affects, but it is still unclear at the moment.

The larger, more significant tax break on the wealthy is the Estate Tax, or rather, the removal of said tax.

This tax, also known as the “Death Tax” puts a tax on families that have to pay for properties, such as houses, that gets passed to an heir after the owner passes.

This tax only affects properties valued at $5.49 million or higher. This means that the vast majority of Americans go unaffected by this tax, yet the Republicans feel it necessary to relieve the upper class.

Big businesses also receive a significant tax break. The current tax rate on big businesses in the U.S. is set at 35 percent, and this plan cuts that down to 20 percent.

Under the suggested plan, there will only be three tax brackets in the United States- 35 percent for the top, 25 percent for the middle, and 12 percent for the lowest. This does suggest, however, that someone making $191,000 annually will be taxed at the same rate as someone making $40,000 annually. This also means the lowest bracket will be going up, increasing taxes on the lowest income families from 10 percent to 12.

The plan also gets rid of a state and local tax deduction, a tax break that gives relief to lower-middle class families the ability to write off state and local real estate taxes from their federal taxes. Removing this will affect those living in states with higher state taxes, a majority of which are Democrat, and can be seen as an aspect of the growing divide between parties.

The plan also suggests an increase in child tax credit, meaning- in theory- lower class families with children should get a better tax break. Also in proposition is a tax break in retirement savings plans and higher education.

Thanks to the proposed deduction increases, the poor should not be paying any more than they currently are in taxes, but that is hard to say at this point.

At the moment the Senate Republicans have a deal to increase the U.S. debt by $1.5 trillion over the next decade, and with no indication of an increase in revenue it would appear Senate Republicans are doing everything they can to reach that mark.

It should be mentioned that the tax plan is still in its early stages and will see drastic changes before it is voted on. If anything, this is closer to a rough outline of the proposed tax bill.

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