On Friday, President Donald Trump signed the Republican tax bill, which leaves an impact on everyone in the U.S.
The final bill, which is over 1,000 pages outlines the winners in the short-term, such as the middle-class, but makes mention that the the long-term winners are corporations.
The law passed the House and Senate without any Democrat support in both houses. It's estimated that the bill will cost $1.46 trillion, but The Committee for a Federal Budget Responsible said it could cost over $2 trillion if aspects of the law are renewed.
However, the average lumps richer households with middle-class ones. For example, a household earning $1 million stands to get a $69,660 average tax cut, so they would see a 3.3 percent boost in after-tax income. The average household making between $50,000 and $75,000 would see an $870 tax cut, or a 1.6 percent bump.
Republicans made corporate tax rate cuts permanent, but some of the individual income tax changes expire in 2025 because of budget limits they set.
By 2027, households earning $75,000 or less will end up paying more in taxes, according to the Tax Policy Center. If you are in the $5,000 to $75,000 bracket, you'll pay $30 more than what today. But households earning $200,000 or more will still get a tax cut. If you are earning $1 million or more, you will get an average tax cut of $23,190 in 2027.
Politifact rated Democratic Senator Kirsten Gillibrand's statement that the tax plan raises taxes on the middle class as "half true." The site notes that Americans making between $38,000 and $70,000 will see their federal tax rate drop to 22 percent.
The Joint Committee on Taxation also predicted that taxpayers making $40,000 and more will see the tax cut immediately. In 2019, everyone with an income will see a tax cut. Again, these will continue until 2025, when the changes expire.
The part of the law that will be permanent benefits corporations. NBC News reports that the law cuts the corporate tax rate from 35 percent to 21 percent. Supporters of the law say it will make U.S. businesses more competitive with foreign companies.
Republicans also believe that cutting taxes for corporations will mean average Americans will see bigger paychecks. Economists told USA Today they were skeptical of that, since some companies have said they plan on using their extra cash to pay debt and stock buybacks.
AT&T did announce plans to invest an additional $1 billion in the U.S. and give 200,000 U.S. workers $1,000 bonuses.0comments
The tax bill also ends the part of the Affordable Care Act that penalizes Americans who do not purchase insurance. The Congressional Budget Office estimates that 13 million more people will be able to pay less than 10 years of premium income per year. About 9 million people have already signed up for the Obamacare federal health exchange, despite Trump's attempts to repeal it.