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Jury Still out on GOP Tax Plan

Matthew Helgesen, staff writer

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Have you ever thought about what it will be like to own a house and have to pay taxes on it? How about how much the government will take from each of your paychecks when you finally get a grown up job?

Those of you who have jobs already know how much it sucks to see a junk of your hard-earned cash disappear each payday for apparently no reason. Well, get ready for it to suck even more if you plan to go onto a college or university. On Thursday Dec. 7 the House of Representatives released a tax reform bill that, among other things, will cut corporate tax rate from 35% to 20% in order to make businesses more competitive and apply good pressure on the economy. This will have a major impact on families, college students, and more.

The bill is predicted to reduce tax benefits and savings for college students a whopping 65 billion dollars. This huge reduction in savings could make repaying student loans only possible for the extremely wealthy. Parents who have children going to a college full-time usually claim the benefit called the American Opportunity Tax Credit, and it consists of about $2,500 dollars for college annually for the first four years of college. Now parents can only collect on the fifth year and the amount is reduced.

This idea works well for college going students up until 2025. Then the reductions will stop and they will have to start repaying and making up for all the debt accumulated from education costs and reduction in tax credits.

Economics teacher Mr. Aaron Lancaster explained:

“Overall, I think the tax plan is going to help business more than individuals. An example of this is the fact that tax cuts to individuals expire in 2025 while those to business are going to be permanent.  In the short term this will put more money in people’s pockets.  So college students might see a little more money in their pockets but by 2025 both families and college students could see their taxes increase. ”

So why cut taxes for corporations and not individuals? The plan seems to follow Regan’s philosophy of “Trickle Down Economics” that, according to Wikipedia, advocates reducing taxes on businesses and the wealthy in society as a means to stimulate business investment in the short term and benefit society at large in the long term.

Until then or 2025, whichever comes first, it looks like we’ll have to wait and see if the largest tax reform in decades will help or hurt us.

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The student news site of Star Valley High School
Jury Still out on GOP Tax Plan