New tax bill is leaving many people scratching headsBy PAT BROWN,
T here still seems to be a lot of confusion as to just exactly how the new tax bill supported by President Trump is going to affect everyone. Some reports are clearer than others, but it was the topic of a big story in the Clarion Ledger last Saturday.
The new rates for individuals are 10, 12, 22. 24, 35 and 37 percent. This is compared to the 2017 rates of 10, 15, 25, 28, 33, 35 and 39.6. The concensus is that many folks will see a reduction in taxes; however, the ones who will save the most are the ones who make the most.
There is also a time limit for the duration of these benefits. The individual tax rates will stay in place until 2025 while the new corporate rates will be permanent.
Corporations also stand to be big winners with a new tax rate of 21 percent. The former rate was 35 percent so this is a huge savings, and these limits, unlike the individual or personal rates, are not slated to go back up.
Single filers get a deduction of $10,400, which will go to $12,000 and married filers will go from $20,800 to $24,000.
Another major change is the $10,000 cap on state, local and property tax deduction. This will have a big effect on states that have high state income taxes as well as high property taxes.
There will also be reduced tax rates for family owned businesses regarding inheritance. The estate tax exemption will be increased from the current $11.2 million to $22.4 million.
Mandated healthcare and fines for not having health insurance have been repealed until 2019.
A lot of other tax issues will play into what your taxable income will be. The best advice we can give is that you need to find a good accountant and let them handle your taxes if you are in a bracket that needs assistance.
It is easy to understand that the Republicans want to lower taxes and reduce what everyone has to pay for governmental services.
The crux of the matter is the debt the nation has accrued over the last several years. There has been a budget deficit every year since 2001. The last budget surplus was under Bill Clinton. Now the national debt is in excess of $18 trillion dollars. It is hard to conceive that you could have a tax cut with so much debt.
Our country can not afford to default on our debt so where do we get the funds when we are reducing taxes to pay for this shortfall?