Changes could happen immediately.
If Senate Republicans are able to pull off the tricky math to pass their massive tax cut bill, Americans would feel the impact quickly.
Republicans are on track to pass a tax bill by the end of the year, and if they’re able to stick to that schedule and the bill is signed by President Donald Trump, it would go into effect on January 1, 2018. The sweeping overhaul of taxes would reduce rates for corporations and individuals (although individual tax cuts would eventually expire), and would also repeal the Affordable Care Act’s individual mandate, effectively kicking 13 million people off their insurance, according to the Congressional Budget Office.
But Americans won’t see a big difference in their tax return when they sit down to file this spring; the proposed cuts in the bill contains would show up the following year.
“When they’ll really see the difference is a year from March and April,” said Marc Goldwein, senior policy director for the bipartisan Committee for a Responsible Federal Budget.
Still, the current proposed tax bill would make more immediate changes, including to the amount of money employers withhold from their paychecks for tax purposes.
Beyond proposed cuts that will show up in people’s tax returns, there are much bigger implications and changes taking place down the line. As written, the Senate tax bill would cause a $1.4 trillion increase to the national deficit over the next decade and let individual tax cuts expire after 10 years, meaning taxes on the middle class would eventually go up. Furthermore, some Republicans are advocating the idea of raising tax rates if the tax bill doesn’t produce enough economic growth to stave off a deficit increase.
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