MONTGOMERY, AL (WSFA) - The New York Times reported that The Dow climbed more than 200 points on Monday and was above 24,850, a record high. The stock market is having a record year based on the anticipation of the pending tax overhaul which is close to becoming a reality.
Corporate America will see their tax rates cut from 35 percent to 21 percent. The tax savings are designed to increase cash flow to boost dividends and stock buybacks, build new plants in the United States and hire more workers.
Politico lists the winners of the tax bill as people who work for a living. This means there will be a tax break for most Americans, at least in the next few years. Businesses.
Under the new plan taxpayers will able to deduct the costs of medical expenses that exceed 7.5 percent of their adjusted gross income for this tax year and next. College loan interest would remain deductible, and tuition waivers for graduate students wouldn't get counted as taxable income.
For lower levels of education, teachers would still be able to deduct some of their out-of-pocket expenses for school supplies they buy their students. There will also be losers with this bill, they include People who make a lot of money and live in high-tax states like New York, New Jersey, and California.
Doctors and lawyers. Some pass-through businesses, including doctors and lawyers, would be precluded from the lower tax rates on pass-through income.
Workers who depend on a regular paycheck. Though they will get a decrease it will only be a minimal decrease in their marginal tax rate, compared to contractors and the self-employed.
The President promised big changes and this bill will be the cornerstone of his agenda. It will be interesting to see if the money companies and tax payers save will in fact be put back into the economy to create jobs and expand businesses.