The Tax Bill Has Passed Congress. Here's What It Contains.

The tax bill promised by Republicans has passed and is waiting for signature from President Trump. Unfortunately, the biggest snafu is that most "positive" tax changes for the average American are temporary, until December 31st, 2025.

Top levels have decreased from 39.6% to 37%, with some small deductions in middle class taxes (from $19,050-$400,000 paid.) Here is a chart with the new tax brackets. All data is courtesy of the Tax Foundation...

There are substantial changes to the deductions you can take...

The details leave a little to be desired. The standard deduction increases. The last bullet point is the worst detail. The tax cuts are temporary...because they have to be. The government can't afford to keep these cuts over the long-term unless growth increases by even more than they expect. We can all hope...right?

One additional bullet point not listed above is that the estate tax exemption doubles from $5.6 million to $11.2 million, which expires on December 31, 2025. The exemption will increase with inflation. That change, of course, is permanent. (eye roll)

Businesses get the greatest boon from the tax bill...

Businesses get the largest benefit, naturally. The corporate income tax cut is huge and permanent. This will get a lot of flak from the public and news outlets, but it's good they're permanent, because it might actually attract new business and investment.

The reduction of the net interest expense will greatly effect the dynamics of many high-debt businesses. That's another positive change, in my mind...debt-ridden businesses that are getting major tax deductions are a risk. My biggest complaint is that the reduction in pass-through income is also temporary, like the individual tax brackets.

Long Story Short...

This will be sold as a "huge win" and "huge tax cut" for Americans, but even the minor tax changes that pass are merely temporary and due to expire at the end of Trump's second term. (If he gets one. I think he will.)

The temporary nature of it is kicking the can of dealing with our massive debts down the road, as both parties will do over...and over...and over...until we're faced with a full-blown debt crisis.

Don't worry! We can always print money to get out of this hole...right?

I hope that helped you understand the basics of the tax bill. I'm going to go buy some more cryptocurrency because the printing presses are going to kick up soon... (Both Tether and the U.S. government's printing presses.)