MONTGOMERY, Ala. (EETV)- After weeks of modifications and work, Congressional Republicans passed the highly anticipated tax reform measure today.
The bill, the first major tax reform in 30 years, works to lower the corporate tax rate and helps to enhance deductions for millions of middle class Americans, especially those with children.
Currently the United States has the highest corporate tax rate of any developed country, this new legislation will reduce the rate from 35 percent to 21 percent, a move many economists believe will bring back capital and jobs from overseas countries.
According to The Heritage Foundation, the bill will result in a long-term Gross Domestic Product increase of roughly 2.2 percent, resulting in a roughly $3,000 increase per household.
The bill also puts a cap of $10,000 on the amount of state and local taxes that residents of mainly Democratic, high tax states, can deduct. Some commentators say that this measure could possibly incentivize these areas to lower taxes.
The legislation received no support though from Democratic lawmakers, some of which say they were left out of the bill writing process. Many Democratic lawmakers point to a possible increase in the deficit, as to their reasons behind not voting for the legislation.
President Donald Trump responded favorably to the news on Twitter writing, “the United States Senate just passed the biggest in history Tax Cut and Reform Bill. Terrible Individual Mandate (ObamaCare)Repealed.”
This tax reform bill ends the first year of the Trump presidency, which has seen major increases in economic growth and decreases in unemployment.
Though economists disagree as to the reasons behind the recent economic growth, many say the large reduction of federal regulations taken on by the Trump administration is one possible reason.
Locally, politicians are mainly reacting positively to the legislation. Alabama Gov. Kay Ivey released a statement that stated, “Simplifying the tax code while cutting taxes will bring much needed relief to Alabama families, will help our businesses grow and will prove to be a boon for our economy.”
Congressman Mike Rogers, who represents Auburn University, released as statement writing, "“The legislation will let Americans keep more of their hard-earned paychecks, will lower the corporate tax rate to make American businesses more competitive and will increase the Child Tax Credit. The bill also eliminates Obamacare’s individual mandate so that families can have more freedom in their health care decisions."
