Republicans in Congress passed the most sweeping overhaul that the U.S. tax system has seen in more than 30 years. It`s considered the Republicans`biggest legislative achievement since the 2016 U.S. presidential election gave that party control of the White House, in addition to the Senate and the House of Representatives.
Last month, the bill passed in both of those chambers, mostly along party lines, with almost all Republicans voting for it, and all Democrats voting against it. And U.S. President Donald Trump signed the bill into law on December 22nd.
This is expected to affect all parts of the U.S. economy and everyone in it. The law permanently reduces the taxes that corporations pay on their profits. Previously, that rate was 35 percent. The new law reduces it to 21 percent.
And it temporarily reduces the taxes that most Americans pay on their income. Though there will still be seven tax brackets for workers based on what they earned, all income groups on average will pay less in taxes. But those individual reductions will expire by the year 2025 unless a future U.S. Congress votes to keep in place.
Supporters of the new law say it will lead to bigger paychecks and more jobs. Opponents say it will mostly benefit the wealthy and increase the U.S. government`s deficit. One thing the law definitely won`t do is affect the taxes that Americans will file early this year. Those are for 2017.