Tax cut and job act Accounting, Finance, SPSS Essay

Tax Cut and Job Act and Its Impact to Corporate Bodies and Individuals
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Tax Cuts and Jobs Act: Tax Reform Changes
The Tax Cuts and Jobs Act provides significant changes in the rates and bases for both corporate bodies and individuals. The most main changes introduced by the Act are reduction of tax rates of companies up to 21 percent, revision of international tax sanctions, and providing a deduction of pass-through income. There is a lot of confusion when it comes to taxation of pass-through income. The act pushes the spending levels of the government so high which raises the country's budget deficit to unmanageable levels. However, the bill act as a short-term incentive for the economy of America. It is predicted that the bill might even leave the Americans with lower standards of living. According to the National tax journal of America, the bill suffers from complexity. A good taxation system is the one that is easy to administer and simple to understand. The bill makes the taxation process more difficult and provides loopholes for tax avoidance (Gale et al, 2019). The main reason that led to the implementation of the bill into law was to take down the burden of tax on American companies and also spur economic overall economic growth of the nation.
The act brings some changes in the taxation system of the United States. The first change is standard and itemized deductions. For married couples, the act nearly doubles the deduction from 13000 dollars to 24000 dollars, for the single Occupants, the figure changes from 6500 dollars to 12000 dollars, for the heads of households, the deduction moves from 9500 dollars to 18000 dollars (Regan, 2019). The main disadvantage of this act is that it reduces the number of taxpayers who choose to itemize their deductions. The reduction in the number of taxpayers is brought by the increase in the deduction amounts. The other disadvantage of the act is that it limits deductions for all the local and National taxes to 10000 dollars in a year for both joint and single occupants. In addition to that, it does not factor in inflation in the above limitation
The second change that the act introduced to the taxation system is zero penalties for those people who cannot afford to full coverage of a health insurance policy. Earlier on, the penalties for the adults were 695 dollars and 347.50 dollars for children. The main disadvantage of this change is that it will reduce the overall national government revenue. The reduction will be due to fewer subscriptions of subsidized premiums by the citi...