In the tax codes, more than three decades and

In this
essay, I will focus on the tax reform bill, which the House
of Representatives passed on November 16, 2017 (Fox & Walsh, 2017). The
bill made a number of changes to the
individual and corporate tax codes (Kaeding, 2017).   This tax bill is a major overhaul of the tax
codes, more than three decades and was the result of a lot of negotiations
between both parties and passed with bipartisan support (Fox & Walsh,
2017).  Thirteen
Republicans did not support the bill and none of the Democrats supported the
bill (DeBonis & Paletta, 2017). The income tax system in the United
States is the most progressive in the world (Barone, 2017).  A progressive tax means that those who have a
high income would pay more taxes or a large percentage of their income than
those who do not earn as much (Kaeding, 2017).  In the other words, a progressive tax is one in which the tax rate
increases as income increases (Nunes, 2016).  In this
essay, I will briefly discuss what do the Republicans, Democrats and others say
about the House bill and I will also figure out if the tax reform bill would be
more progressive or less.  For an
example, about 40% of the federal income tax revenue is paid by the richest
people or the 1% who have the highest income (Barone, 2017).  It shows that the tax system is very progressive,
as the high earners pay more taxes.

It is
good to know that are seven (7) tax brackets today with taxes at 10%, 15%, 25%,
28%, 33%, 35% and 39.6%.  The tax
brackets would be reduced from seven (7) to four (4) with the House bill or as 12%, 25%, 35%, and 39.6% (Sahadi, 2017).  In addition, the House bill included a proposal
to reduce corporate tax rate from 35% to 20% in the next few years (Gaudiano,
2017).  The tax codes in the United
States are very complicated.  In
addition, the current progressive tax system, would allow for a number of
adjustments to taxable income.  For an
example exemptions, deductions and tax credits (Nunes, 2016).

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With
the House bill, Republicans would like to simplify the tax code and remove
inefficiencies in the tax codes.  In
addition, Republicans want to have $1.5 trillion in tax cuts over a
decade.   It means that the most of the
tax cuts would go to corporations and wealthy Americans (DeBonis, &
Paletta, 2017).   In addition, the bill
would expand child tax credit, leaves the EITC
unchanged and limits several deductions that benefit the wealthy but the top
rate of the federal income tax would be the same (American taxes, 2017).

House
leaders are happy with this as the House speaker said “Passing this bill is the
single biggest thing we can do to grow the economy, restore opportunity and
help these middle-income families that are struggling,” (Mascaro &
Puzzanghera, 2017).  Republicans pointed out that there is some benefit for the
low-income people as they would not be required to have health coverage, and it
means that they would not receive subsidies, like as tax credits, for the
insurance that they do not buy (Kaplan
& Rappeport, 2017). 

Democrats do not support the
bill and none of them voted for it for two reasons:  One is that it would not be good for the poor
people and that the bill could cut the corporate and estate taxes (American
taxes, 2017).  Democrats were
unified against the plan, mainly those who were mostly concerned about the
proposed elimination of deductions for state and local income taxes, and the
capping of property tax deductions at $10,000 (Mascaro & Puzzanghera, 2017). 

There
are several concerns about the tax reform bill as Caudiano (2017) thinks
that the proposed taxes for corporations, would be good for the
privileged majority but would not be good for the severally
disadvantaged minorities, like women, and
people
with disabilities.  Barone
(2017) thinks that the republican tax bill is harmful because they make
federal taxation less progressive.  The Tax Policy Center analysis that the bill will be a benefit for
those top 0.1% of earners by an average of $278,000 by 2027.   But bottom 20% of earners will get only a $10
in cuts in the average (American
taxes, 2017).  Moreover, the Tax Policy
Center found that
half the benefits of the bill go to the top 1 percent by 2027 (Logan,
2017).  In addition, the Tax Policy
Center estimate that the tax reform bill would not produce enough economic
growth to fully offset the more-than-trillion-dollar revenue losses produced by
the measure (Jagoda, 2017).   The Joint Committee on Taxation estimated that
many low-income earners would end up with tax increases, not tax breaks
(Mascaro & Puzzanghera, 2017).  Also JCT
estimate that most Americans would pay the same taxes or even a lower rate
until 2023, then for the next five years 92% would pay either less or nothing
as they pay the same.  In 2023 it would
change, only 40 percent of Americans would pay less and 22 percent would pay
more (Long, 2017). Some
have a concern about the tax bill’s potential additions to the federal deficit
(Perticone, 2017). Bauer (2017)
says that house bill could bias the tax policies of state and local
governments.   Bauder (2017) thinks that
with the tax bill, which would allow fewer deductions, it would be a minor
distortion.  

American taxes (2017) said
that seven in ten Americans want to help the poor people, and with a more
regressive tax system, like as VAT, it would help to curb spending.  Republicans would like the flat taxes but
they do not support a VAT taxes as they think it would expand the government (American taxes, 2017).  Barone (2017) said that system can be
more progressive with a more progressive income tax rates or raising a specific
amount of income as people earn, but it would be at the risk of tax avoidance.  It can reduce economic growth like having less
of taxes would increase it (Barone, 2017).

This
tax reform would benefit the wealthy people, as they will do very well. The
Republicans wants to have a less progressive tax system, but it is very difficult,
as they do not want to have a flat tax rate and increase the VAT system.  So they find a way to cut taxes, which gives
them some benefit, as they would pay less tax. 
I would say that the taxes system would be a bit less progressive as the
highest income earners pay the same taxes as before or 39.6% but they would pay
less taxes as they get a lot of benefit from the tax cuts in the next few years.

The poor or middle-income earners would not get a benefit and that is why I
would say that the taxes would be less progressive.