What does the new tax law mean to me?

December 28, 2017

The changes to the tax law likely will not greatly affect the amount of taxes paid for most low-income and most middle class individuals, who do not own a home, in the short-term. Although, it will affect public services provided to multiple groups.

 

The Earned Income Tax Credit has not changed. The standard deduction has been doubled but exemptions have been eliminated. The child tax credit has been slightly expanded. The tax brackets are the same, except it has been lowered for the highest earners.

 

The tax cuts, however, are temporary.  In the long-run, it is anticipated that taxes will increase for most but the very top income groups.

 

For more of an analysis, go to taxfoundation.org/final-tax-cuts-and-jobs-act-details-analysis

 

Unfortunately, as the tax law increases the deficit, various public entitlement programs will be cut in all likelihood. Due to the PAYGO rules, which requires cuts when legislation will greatly increase the deficit, will decrease funding to Medicare and other programs. It is also likely that funding given to the state for various goods and services will be cut. This can include mental health services.

 

 

The new law will likely spur some job growth.  However, it is not apparent that this will increase wages. Most likely, the more money one has, the more one can keep.  

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