By Arianna Bekas
On December 20, 2017, a major triumph for the Republican legislator occurred. With a vote of 51 to 48, the Republicans were able to pass their historic tax bill. The passing of this tax bill was necessary to not only fulfill campaign promises of new tax reforms, but to also show that the Republicans, who currently are the majority of both the House and the Senate, were capable of banding together to actually get legislation passed (in regards to the multiple failures of the Republican health care reform).
The logistics of the tax bill usually leads to some confusion, especially when it comes to the way people from different parties interpret it. Within this new tax plan the standard reduction, which is the amount of money a person will receive from the government if they choose not to itemize, will be doubled from 6, 500 to about 12,000 dollars. However, while this sounds like a very good deal, it should be noted that this increase is temporary and will go out of effect in the year 2025. Another major tax deduction that was made is for the corporate tax rate, which was dropped from 35 percent to 21 percent. This is a permanent change. Although the tax plan itself was a win for the Republicans, they did, however, fail to fully get rid of the estate tax, which is a tax on property, money, stocks, etc. This tax applies only to the wealthiest because for it to apply, your estate must be worth more than 5.4 million dollars.
The Republicans also managed to pull out another big win when it comes to fulfilling their campaign promise of repealing the American Care Act. The Republican tax plan includes the elimination of the penalty for people who choose to forgo health insurance. This repeal will, in fact, cause funding for the ACA to plummet, meaning that higher premiums will be necessary to ensure its success (however, seeing as this particular form of health insurance is supposed to cater to the more impoverished people of America, it is unlikely that they will be able to afford the high premiums, meaning that there will most likely be fewer people enrolling for health care). While this particular aspect of the bill seems like it does more harm than good, the tax plan does provide a large expansion to the child tax credit, which is where your parents write off how many kids they have on their taxes and receive a sum of money from the government for them. The child tax deductible is currently one thousand dollars, but under the new tax plan, the tax credit will be raised to about two thousand dollars. While this will help the vast majority of American people, sadly the families on the poorest side of the spectrum will fail to reap these benefits. The Republican tax plan continues on with the repeals by making it completely impossible for teachers to receive their usual two hundred and fifty dollar tax deduction that was given to them to compensate for supplies and other items that they have to pay for out of pocket.
While the Republicans initially wanted to repeal the tax deduction for people who have student loans, they ended up scraping that idea after tons of backlash from not only the American people but also the academic community. Another controversial repeal the Republicans wished to make but failed was the elimination of the Johnson Amendment. The Johnson Amendment is the 1954 law that restricts churches and other non-profit organizations from engaging in political activity (which stems from the constitutional ideology of separation of church and state). The tax plan also includes a more generous deduction for people who have large amounts of medical expenses they have to pay out. The Republicans lowered the threshold from 10 percent to 7 percent, thus lowering the bar that medical expenses must pass before people can receive deductions for them.
The passing of the tax plan caused many Americans to be fearful of their future and their ability to receive well-deserved tax breaks and deductions. We can only hope that the Republican plan will work itself out with the people’s best interest at heart. But hey, if worse comes to worse, 2018 is a primary election year and we can always vote those suckers out if they do end up screwing us over.