Posted 1/03/18 (Wed)
By Neal A. Shipman
Thanks to the passage of the Tax Cuts and Jobs Acts by Congress and President Trump’s signature on this landmark legislation, American taxpayers and businesses will finally see the first major overhaul of the U.S. tax code in 30 years. And with its passage that means that by and large virtually every American individual and business taxpayer will see fewer of their hard-earned dollars going to Washington, D.C. and will remain in their pocket.
But to listen to the critics of this legislation, one would think that by allowing individuals and businesses to keep more of the money that they have earned is the economic ruination of the American economy.
Those critics are dead wrong. Yes, the bill will mean that the federal government may have less money. And unless Congress can find ways to trim expenditures, the deficit has the potential to increase.
But on the positive side, the new legislation will mean that the vast majority of taxpayers will find that they have more money in their pocket. That means individuals will have more money to either save or to purchase more products. For businesses, the tax savings means that they will have more money to hire more employees and expand their businesses. And what the critics fail to realize is that when individuals and businesses pay less in taxes, they spend those dollars and help grow the economy.
So how does the overhauling of the U.S. tax code play out for North Dakotans? Very well, according to information from U.S. Congressman Kevin Cramer.
First and foremost, according to Cramer, the 82 percent of the state’s residents who took the standard deduction on their 2014 tax returns, will see that deduction double to $12,000 for individuals and $24,000 for families. Under this provision alone, a family earning the state’s median household income of $59,000 would pay no federal tax on almost half of their wages.
That standard deduction increase, as well as the lowering of all tax brackets for individuals, will mean significant savings to North Dakotans at tax time.
For the state’s small businesses, the tax rate under the Tax Cuts and Jobs Act will be no more than 25 percent, the lowest it’s been since World War II. And the corporate tax rate will be lowered from 35 percent, the highest rate in the industrialized world, down to 20 percent.
Is the tax bill perfect? Hardly. But anytime that Congress passes legislation that allows individuals and businesses the opportunity to keep more of the money that they have made, it is a great day for America and the American taxpayer.
America was built by its hard-working citizens and the individuals who invested their lives in building businesses that employ workers. It’s nice to see this country’s tax structure finally change to benefit them.
And for the majority of American taxpayers, they will begin to see the effects of the bill in the form of fatter paychecks as early as February, when the new withholding schedule goes into effect.