A major goal of the U.S. tax reform signed into law in December was to simplify the tax code, but ended up missing the mark.
The Republican led reform lowered tax rates for a majority of American businesses and individuals, doubled the child tax credit and the standard deduction. However, the number of tax brackets remains the same at seven, the personal exemption has been eliminated, state and local tax deductions have a cap and several other deductions have been eliminated. While lawmakers tout several beneficial elements of the new code, U.S. Congressman John Moolenaar tells WSGW’s Art Lewis actually simplifying the code was a missed opportunity.
“When we passed our (the House of Representatives) original version, it was three or four different brackets. and obviously the Senate’s version was different. The legislative process is one of compromise, we did end up going with the Senate version in terms of the number of brackets, so it isn’t as simplified as it could have been and that was a missed opportunity.”
The reform is projected to add to the national deficit by about $1.46 trillion over the next decade, though Moolenaar says that’s based on a “static accounting system.” He says the economic growth the new tax code is expected to generate will far outpace the deficit.
The new tax code went into effect January 1 but the changes will not affect 2017 taxes.