Today, President Donald Trump signed the tax law. We will feel the effects in February 2018. He has been talking about it for a long time. Finally, it’s been solidified. Almost everybody is going to save money on taxes. That being said, there is some controversy regarding this law. After all, there is controversy on all major new laws.
Most people will save between a few hundred to a few thousand dollars each year. By most people, I mean individuals or families making less than one hundred thousand dollars a year. The real controversy comes from two main things. Business is going to save a whole lot more. And the business tax cuts are permanent, while individual tax rates will eventually go up in about ten years. First, let’s talk about the business savings.
A business will save either millions or billions of dollar. So, what do they get to keep that much money when families only get to keep a few thousand? The answer isn’t in a dollar amount. The answer is in the percentage of taxes paid. For example, individuals and families will save about 2% of taxes each year. But business will save much more than that. The reason for this is that Congress and the president want businesses to create jobs with their extra money. Will they do this? Only time will tell.
The goal is for more people to get hired, for the economy to grow faster, and for more people to get more raises and bonuses. The great news is that some people will get bonuses. Companies like AT&T and Comcast have announced bonuses to all of their employees. That’s wonderful! I hope they continue to do things like that. And I hope that they give raises as well. Who knows, you or I might also be beneficiaries of these raises!