How Tax Cuts and Jobs Act Will Affect You and Your Business

According to the nonpartisan think tank, Tax Foundation, the Tax Cuts and Jobs Act has the potential to “significantly lower marginal tax rates and the cost of capital, which would lead to a 1.7 percent increase in GDP over the long term, 1.5% higher wages and an additional 339,000 full-time equivalent jobs.” While it seems clear that corporations will benefit greatly from tax reform, there are a number of indirect benefits for individual taxpayers as well.

The American corporate tax rate was previously one of the highest in the world. This provided American companies with a strong incentive to move their headquarters to other nations with substantially lower tax rates. In the past few decades, over fifty major corporations, Samsonite, Medtronic, and Restaurant Brands among them, have chosen to move to other countries to save in taxes. By making the U.S. tax system more internationally competitive through lower corporate tax rates, Americans can expect to see more jobs and increasing wages.

See Stephen Korving, How Tax Cuts and Jobs Act Will Affect You and Your Business, Inside Business, January 2, 2018.