Tax Cuts Research Paper

These cuts will result in a decrease of government expenditure and an increase in household tax. Firms will suffer, with little support from the government sector, reducing the circular flow of income. Household savings will increase, as they will be paying more in tax. Firms will then be impacted because consumers will be spending

Cutting down individual taxes will generate more employment and will help generate more money, it will create more tax revenue, according to Mike DeBones, from “House Passes 2018 Budget, Taking a Crucial Step toward Tax Overhaul.” He states that “Our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle-class Americans and free up American businesses to grow and hire,” House Budget Committee Chairman Diane Black (R-Tenn.) said during floor debate Wednesday. I agree if the tax is

First, lower tax rate will lower revenues. Overall tax cuts for a new coming year will bring the different amounts of revenue for the previous year if the tax rate falls

Government tax cuts and taxation on the middle class always seems to be the debate in every election year in the U.S. This debate is always related to the federal deficit and our national debt. The pro side of the argument is that if you cut taxes the revenue generated for the government will fall and it will then expand national debt. But in the counter arguments on cutting taxes can stimulate the economy, leading to an increase in government revenue with the redux in tax rates. According to Forbes article “Do Tax Cuts Increase Government Revenue?” “Using the data from 1913 through the end of 2011, the correlation between the maximum marginal income tax bracket and total Federal receipts is a negative 0.50. In simple terms, when taxes are cut, Federal revenue has a very strong tendency to rise! And when taxes are raised, government revenue has a strong tendency to fall.” ("Forbes Welcome", 2016). I believe the tax cuts proposed to the 95% of the country will have the intended a stimulus effect on economic consumer spending which leads to an increase in government revenues and eventually work its way down to a rise in the real GDP. The tax cut policy should generate revenue and show positive results in Home Depot’s financial gains. I believe the lowering of the tax rates will increase disposable income, and boost consumer spending, directly again home depot and the economic growth and it should succeed in its intended goal of creating a higher standard of living.

I am going to cut business taxes massively” (Donald Trump Quote). President Donald Trump’s tax plan, if implemented, would do just that. Estimations made by the Tax Policy Center state that Trump’s proposal would cut taxes by an average of about $5,100, including a 4.9 percent tax cut, for middle-income households (An Analysis of Donald Trump’s Tax Plan). No matter the details of the tax reform plan that passes through the legislature, the best tax plan for the country would include the basics of lowering taxes across the board to create economic growth throughout the country, increase federal revenue that can be used to reduce the annual deficit, and keep money in the hands of American

President Donald Trump and congressional Republican unveiled their framework for tax overhaul last Wednesday. The plan includes simplifying the tax structure from seven brackets with rates ranging from 10 percent to 39.6 percent to three brackets of 12 percent, 25 percent and 35 percent. The income levels of those rates were not announced in the plan/

The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity. President Trump said on Wednesday that the cuts would increase investment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is already expanding.

The result of this si 85 percent of the tax cut benefits the top 1 percent of earners. This is because most small businesses do not earn enough to qualify for the top tax rate. (So they will not benefit from the cut.)

Even though the GOP’s tax plan is theoretically a great plan in attempt to the spur the economy, the risk is very great. The risk is large because when the taxes are cut, this means that the government would be losing an immense amount of money. “The Trump administration made no mention on Wednesday of how it planned to pay for such steep tax cuts, which could cost $2.2 trillion, according to the Committee for Responsible Federal Budget” (Gelles). The amount of money lost is crucial in determining how this plan will fare out because even though many of the businesses will become richer and more prosperous, the government will lose money to spend on things like public works, which help to create jobs and spur the economy. Even though this plan is thought out to allow the economy and businesses to prosper, history has showed that economic growth resulted from tax cuts does not sustain long. This can then lead to smaller businesses getting rich quick and then losing that money later down the line, which would then hurt Amazon because they would too prosper for a while, but then lose that money. The government would

economy. While the rate cuts would raise the after-tax return to working, saving, and investing,

This goes without mentioning that retirees will also benefit from the increase in standard deductions which will be double the current amount. As Tuchman puts it, retirees can save significantly on taxes by directly putting more in their 401Ks or IRAs and hence reducing the taxable income.

So as a result, from this tax plan house hold with income $30,000-$50,000 will save $638 on their income tax, house hold with income $50,000-$75,000 will save $1.035 on their income tax, household with income $75,000-$100,000 will save $1,439 on their income tax, household with income $100,000-$200,000 will save $2,356 on their income tax, household with $200,000-$500,000 will save $5,090 on their income tax and household with more than $500,000 will save $29,901 on their income tax. From these calculation results we can clearly say household with better income sources will get most benefit from this tax plan instead of saving money for low income middle-class families. According to this tax plans, the middle-class families not only getting less tax cuts but also losing government incentives. That’s why Cohen states that many households would pay less in taxes, but some would pay more which including about 13 million middle-class families, according to estimates by

Another part of the Trump tax plan that is beneficial to economic growth is the elimination of the estate tax, better known as the death tax. The estate tax, in a nutshell, is a tax on your right to transfer property after death. According to the IRS “It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 (PDF)). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

On the campaign trail and now transitioning to President, Trump gave every indication that he intended to remain true to Republican tax principles. Besides broad cuts for the wealthy Americans, Trump’s proposed plan aims to reform corporate taxes, which would lower federal rates from 35% to 15%. On its own, slashing corporate tax rates should theoretically lead to a large sum of repatriated profits and greater investment. But portions of overall Trump’s agenda to increase domestic production over importing would end up wiping out the majority of the benefits.

One of the reason as to why cutting income tax would have significant impact on a country’s exports is through the change in price of domestic goods as compared to the goods produced in other countries. Significantly cutting income taxes of employees will have an effect on the prices of commodities in a country owing to an increase in aggregate demand of the products produced in the country. The laws of demand and supply are