The final project of tax reform: how it touches you personally

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On Friday, the Republicans agreed on a final draft of tax reform, overcoming disagreements between the bills of the House of Representatives and the Senate.

According to Washington PostIt is expected that the full text of tax reform will be published on Friday and voted next week.

What will be changed

New tax for the rich: in the final plan, the maximum tax rate for top employees is reduced. Now the highest rate is 39,6% for couples who earn $ 470 700. In the new edition this rate will be reduced to 37% and the threshold value for the maximum rate will increase.

Large-scale tax cuts for corporations up to 21%. From 1 in January to 2018, large companies can see that their tax rate has dropped from 35% to 21%, which is the largest one-time decrease in the rate of US history for large American companies. This will reduce the tax burden by about $ 1 trillion over the next 10 years. Republicans believe that this change will lead to economic growth, but experts from Wall Street believe that the effect on the economy will be "modest."

You can deduct only $ 10 thousand in the form of government, municipal taxes and property tax from its federal income taxes. This is one of the most controversial points of the plan. Until now, state and local deductions have not been limited. It is expected that this rule will adversely affect New York, Connecticut and California and lead to a drop in property prices in cities with high taxes, in addition, less money will be left to repair public schools and roads.

Working families will receive more tax credit for children. The current tax credit for children is $ 1000 for each child, in the new edition it is increased to $ 2000 (for families with an income of about $ 400 thousand). Lower-income families can also expect a raise. For such families today, the benefit is about $ 1100, in the new edition - $ 1400.

You can inherit up to $ 11 million without paying tax. In the current edition, Americans can inherit up to $ 5,5 million without having to pay tax. In the new edition, this threshold was doubled - to $ 11 million tax-free (or $ 22 million for married couples).

In general, the Law on Tax Reduction and Employment is the largest one-time reduction in the corporate tax rate in American history - from 35% to 21%. The bill also cuts taxes for the vast majority of Americans and small businesses.

Recall the Trump administration has begun work on tax reform in January and predicted that it will complete by August. Now it is planned that before Christmas tax reform will be approved by the President of the United States.

Read also on ForumDaily:

How will tax reform affect you if you earn less than 100 thousand per year

Rules and rates of taxation of incomes of Americans for 2018 year

Trump's Tax Reform: What the President Offers

What are the taxes of Americans spent on?

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