The Brand New Proposal for Tax Cuts May Result in the Drastic Changes of Government Spending Programs
Republicans in the House of Representatives are standing with President Donald Trump and his bid to lower drastically the corporate taxes, this measure will come to a decisive vote in the coming days. The radical legislation aims at the creation of tax cuts worth several trillion dollars and at the same time, cutting the federal spending programs significantly. The sponsors of this move are trying to have the bill confirmed as quickly as possible but there are still worries from both the Democratic and the Republican sides.
Money Matter and National Deficit
The latest tax plan has already been a subject of a heated debate in the US Congress, with major concern being how it will most probably still bear a huge deficit in years to come. The bill foresees an enormous amount of tax reduction both for corporates and individuals but this fact has provoked severe criticism from the people who think that it will bring a heap of debt to the state. The Congress Budget Office (CBO) gave a projection that the sole tax features would bring an increase of $3.8 trillion in federal deficit within the next ten years, thus exposing the US economy to a higher level of debt.
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Those who are in favor, though, claim that these tax cuts will give the start of the path of economic growth again and consequently, new job openings. Practically, the main reasons for the usefulness of the tax reductions by the 2017 reforms of the then-President are the ones mostly cited by the supporters arguing that this has been helpful for American businesses and taxpayers.
Modifications in Government Spending Programs
However, as per the details of the bill, apart from tax cuts, it is proposed to also cut federal safety net programs which would be a significant source of the deficit. It is talked about Medicaid, specifically that funding for it has to be trimmed, in addition to food assistance programs, and other social services, that is to say, the Republicans will tighten the requirements of the recipients of these programs. Lastly, some critics predict that this move might not only do harm but also that it may make the low-income families feel the pressure the most in the shape of the possible exclusion of millions of Americans from the country’s trust members list.
One of the most important working provisions of the bill is that the Medicaid recipients will have to work harder under the new law for a minimum of 80 hours a month. They are proposed for people who are capable of working but are unemployed, and work or participate in community programs for a minimum of 80 hours a month. Additionally, it is planned to extend the same work requirements to the food assistance recipients via the Supplemental Nutrition Assistance Program (SNAP).
Current Tax Provisions and Changes
Adopt the following changes as the main ones, i.e. the increase of the standard income tax deduction proposed to $32,000 for joint filers, and other benefits for single parents. But the credit for the children and the deduction for the elderly are raised, the first to $2,500, and the latter to aid seniors in paying their taxes for their Social Security income. These is for the purpose of reducing the tax load on the so-called sandwiched” and the seniors.
Yet, this plan to offer tax concessions to the wealthy, and also to the commercial sector was met with strong disapproval, the main argument of the opponents being the fact that the lower and the middle-class people do not benefit in the same way and the problem of the increased social and wealth inequality persists.
Vote Schedule and Blockage Risks
This broad law faced a tight deadline with Republicans as they tried to pass, they were pressed for time as after their Memorial Day Vacation, they were to submit the complete bill by the deadline of Memorial Day. Even with the president’s calls for unity within the party, conservative lawmakers are still not convinced to support the bill, worrying about the impact of the national deficit and about the possibility of losing voters in the main states.
Though the GOP leadership is still convinced that they can muster enough votes in the House, the passage of the bill through the Senate is yet to be seen, as the Democrats are probably vehemently against the bill.
