Republican “Tax Cut And Jobs Act” Reduces Standard Income And Corporate Tax Rates And Revises Several Types Of Deductions; Will Add $1.5 Trillion To National Debt
The Republican Tax Reform Plan reduces the standard income tax rate at a similar amount for most individuals across all income levels and maintains 7 income tax brackets.
While the legislation is long and complicated, here is a non-exhaustive list of additional highlights of changes:
- The corporate tax rate is reduced from 35% to 21%, “the largest one-time rate cut in U.S. history for the nation’s largest companies“
- The standard deduction is nearly doubled (single: $6,350 to $12,000; married/joint: $12,700 to $24,000)
- Personal exemptions for dependents ($4,150 per person) are eliminated
- Limits state and local property tax (SALT) deductions to $10,000 (“under current law, the state and local deduction (SALT) is unlimited“)
- Repeals the Affordable Care Act tax on individuals without health insurance
- “Raises the estate tax exemption for single filers to $11.2 million from $5.6 million“
- Allows oil drilling in the Arctic National Wildlife Refuge (to bring in additional revenue)
When factoring all changes to taxes, deductions, and other economic factors, the Tax Policy Center has estimated the following overall changes to after-tax income by income level.