Congressional Republicans finally reached a deal on the tax cuts, the biggest reform in 30 years. This sets the stage for a vote next week. The U. S. corporate tax rate was changed upward moving to 21%. The top[ tax rate will be reduced marginally from 39.6% to 37%.
The corporate alternative minimum tax will probably be repealed. The proposed $10,000 cap for state and local property tax deductions should survive and the cap on mortgage interest deductions will be set at $750,000 on home loans, and provide the owners of pass-through businesses with a tax rate of 20%.
Of course, the criticism from Democrats is the typical Marxist slant that the Republican plan benefits the rich and corporations rather than the middle class. Small business employs 70% of the civil workforce and that is the engine that creates jobs. The top rate moves down from 39.6^ to just 36%, so that is nothing to write home about, yet the Democrats will do so anyway.
This post was published at Armstrong Economics on Dec 14, 2017.