Tax Cut And Jobs Argumentative Essay

Background

The 2018 Tax Cut and Jobs Act, effective beginning of January 1, 2018, was enacted with the intention overall to simplify the current tax laws within the United States. These changes affect all forms of taxes and groups – including individuals, corporations, and “pass through” entities, to name a few. Several benefits are immediately apparent to both the individual and corporate taxpayer as a result.

For individuals, tax rates decrease across all brackets and standard child tax credits and standard deductions increase with the caveat of a phase-out plan through 2025. However, with these benefits comes the elimination of most itemized and modification of other standard deductions. For many businesses, there are several advantages

One of the largest companies to make such an announcement was Walmart. On January 11, 2018, Walmart announced plans to increase the starting wage rate for hourly employees starting in February, 2018, but also announced a $1,000 one-time cash bonus, which would be paid by the end of their January 31st fiscal year. The year-end cash bonuses would be expensed in the 2017 fiscal year and subject to the 2017 tax rate because of Walmart’s February 1st to January 31st fiscal year. Walmart estimated this would amount to a total of $400 million in one-time payments to associates. The timing of this announcement and payment was particularly noteworthy in the context of the tax law change. As you can see in the table-1 (Appendix), the tax benefit of paying the one-time bonuses in FY17 versus FY18 was significant, representing almost $60 million in savings. In short, if a company decided that they would pass on the benefits of the new tax law to their employees, the timing of when they would pass this on could be leveraged to provide an even greater