The US Senate has approved a US$1.5 trillion tax Bill with permanent tax breaks for corporations and temporary tax cuts for individuals, introducing the most drastic changes to the US tax code since 1986.
All Republicans voted in favour, and all Democrats against, with independent analysts suggesting that the changes will disproportionately benefit the wealthy and corporations.
The Bill lowers the top individual tax rate from 39.6% to 37% and slashes corporate tax to 21%, down from its current rate of 35%. The largest individual tax breaks will go to the wealthiest Americans. The individual tax cuts are slated to expire in 2025 to ensure they comply with Senate budget rules, but Republicans said a future Congress would extend them.
According to the Guardian newspaper, the proposed legislation has been heavily criticised for limiting tax deductions for home mortgages and state and local taxes as well as adding over a trillion dollars to the budget deficit. It will also eliminate the Affordable Care Act’s individual mandate, which requires Americans to either buy health insurance or pay a penalty.
Independent analyses have shown Trump and his Cabinet stand to gain millions due to a provision within the Bill that doubles the exemption of the so-called estate tax. The President will also save up to $30 million from the repeal of the alternative minimum tax, an additional income tax designed to prevent the wealthy from using loopholes to avoid paying taxes.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
The US Senate has approved a US$1.5 trillion tax Bill with permanent tax breaks for corporations and temporary tax cuts for individuals, introducing the most drastic changes to the US tax code since 1986.
All Republicans voted in favour, and all Democrats against, with independent analysts suggesting that the changes will disproportionately benefit the wealthy and corporations.
The Bill lowers the top individual tax rate from 39.6% to 37% and slashes corporate tax to 21%, down from its current rate of 35%. The largest individual tax breaks will go to the wealthiest Americans. The individual tax cuts are slated to expire in 2025 to ensure they comply with Senate budget rules, but Republicans said a future Congress would extend them.
According to the Guardian newspaper, the proposed legislation has been heavily criticised for limiting tax deductions for home mortgages and state and local taxes as well as adding over a trillion dollars to the budget deficit. It will also eliminate the Affordable Care Act’s individual mandate, which requires Americans to either buy health insurance or pay a penalty.
Independent analyses have shown Trump and his Cabinet stand to gain millions due to a provision within the Bill that doubles the exemption of the so-called estate tax. The President will also save up to $30 million from the repeal of the alternative minimum tax, an additional income tax designed to prevent the wealthy from using loopholes to avoid paying taxes.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
