Tax On December 2 the US Senate passed the Tax Cuts and Jobs Act, a large-scale overhaul of the tax system, by 51-49 votes. This is the first significant legislative achievement of the Trump presidency, and the president tweeted: ‘Massive tax cuts for working families across America!’ Economists took a more nuanced view. While average taxes for most Americans will fall, the biggest beneficiaries are likely to be the wealthiest 5 per cent. A key element of the act is a reduction in corporation tax, from 35 per cent to 20 per cent. Critics say this corporate bonanza is likely to increase inequality, as it is business owners and the rich who own most shares. Congress’s Joint Committee on Taxation predicts that the cuts will add $1 trillion to public borrowing by 2027. Treasury Secretary Steven Mnuchin has said that the hoped-for boost to the economy will wipe out this increased budget deficit, though the effect of past tax cuts has been to increase public debt.
Trump gets traction on tax at last
