The president’s tax reform plan is set to take effect in 2018, but the benefits are already being seen.
Corporations are giving bonuses, promising wage increases, and planning to expand.
And some taxpayers are taking steps this year to lighten their tax load.
When President Trump signed the new tax bill into law, he expressed confidence that Americans will like it once they start receiving larger paycheck next year.
Some Democrats argue the new tax law will only benefit corporations and the wealthy, but the Tax Policy Center says 91% of middle-income Americans will receive a tax cut in 2018.
That revelation even pleased socialist Senator Bernie Sanders who appeared on CNN’s State of The Union with Jake Tapper.
“It is a very good thing and that’s why we should have made the tax breaks for the middle class permanent,” Sanders said.
The individual tax cuts are temporary and will expire within eight years if Congress does not act to make them permanent or extend them.
Former Oklahoma Senator Tom Coburn said he thinks the new tax law will do remarkable things for the U.S. economy.
“There isn’t a tax bill that has ever been passed that everybody likes, but in the long run this is going to be very, very beneficial in terms of job creation, in terms of raising wages for middle income and lower and middle-income families,” he explained.
Already, Wells Fargo and Fifth Third Bancorp say they’re raising the minimum wage at their companies to $15 per hour. Boeing, Comcast, and AT&T are giving their employees bonuses and they’re promising to spend billions to expand their businesses nationwide.
Some taxpayers in higher taxed states are jamming local offices to pre-pay next year’s property taxes so they can get a bigger deduction this year.
Next year, the allowed deduction for combined property and local income taxes is capped at $10,000. The president and many members of Congress wanted the cap because they felt it was unfair for Americans in states where taxes are lower to subsidize people in higher taxed states like California and New York.
As for charitable deductions–they’re still allowed for people who itemize their taxes. But the doubling of the standard deduction to $24,000 for married couples and $12,000 for singles means more people are likely to forego itemizing their taxes next year.
Frank Nico, CBN’s Executive Director of Planned Giving says if people intend to do that, they still have time to help their favorite charities this year.
“If this year you’re itemizing deductions and next year it appears you’re going to end up taking the standard deduction because of the increase you can push forward some of the giving you have planned for 2018 into 2017, but you’ve go to do it by year-end.”