Today, the house and the senate will vote on the final version on the tax bill proposed by the GOP. There have been many changes to the bill since the bill was first drafted. In essence the bill will give everyone a tax break in the near future, and then rates are expected to rebound in 2027. The bill will change the tax brackets, lowering personal taxes for unmarried individual filers and married joints filers anywhere between 1 to 3 percent. But the tax bill won’t just affect individuals, it will also affect businesses across every industry. However, the effect may not be proportional across every industry. For example the tax bill will greatly reduce the tax cuts available to financial firms and real estate companies, but not as much for manufacturing and mining. Part of this is because both mining and manufacturing already have a relatively low effective tax rate. Alternative energy will also benefit from the new tax bill. In the final draft, the bill will preserve beneficial tax breaks for wind and solar power.
One of the biggest changes coming with the new tax bill will be the tax rates for homeowners. The interest deduction on homes will only be applicable to the first $ 750,000 of your mortgage, down from the $ 1 Million current threshold. This tax deduction has made home buying more affordable over the years. However, in order to get this deduction, owners have to itemize on their taxes. But, with the new changes, the standard deduction will nearly double. As a result, itemizing will give homeowners less benefits than the standard deductions. The new tax bill will bring many changes to the tax code, mainly a tax break that business owners and the middle class will be able to benefit from. The benefits, if the bill passes today, will have an effect on our taxes as early as next year. The resulting tax break will help businesses grow and potentially lead to more jobs and a stronger economy.