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Middle class could gain from tax cuts

Posted at 10:44 PM, Dec 20, 2017
and last updated 2017-12-20 22:44:44-05

President Trump hailed his new tax law as a Christmas gift for most Americans, but a local tax expert says it's clear not everyone will benefit. 

"It really depends on the taxpayer, everyone has a different tax situation," said Amy Dalen, who chairs the tax advisory committee for HBK in Naples.

Under the new law, the standard deduction doubles from $12,000 to $24,000.
The child tax credit also increases, meaning the bigger your family the more you save.

"A family ended up, they could save around 5,000 dollars,
 just by looking at their income from 2016 and if it were in 2018," said Dalen.

The individual tax credit only lasts until 2025, under this bill however, cuts to the corporate tax rates will last forever."

"I believe the hope behind this tax bill is it will promote economic growth, and so with that hopefully there will be higher profits at businesses and that will translate into higher wages for employees," adds Dalen.

Democrats and some Republicans are skeptical, saying corporations will pocket the savings instead of passing them on reinvesting in the job force. 

Dalen says the federal government may have to watch its spending, since it will be taking in less revenue under this law. in fact, non-partisan analysts have said it will drive up the deficit.

"There's always a concern about how much the government is spending versus how much is actually being brought in," said Dalen.

Some parts of the tax bill will take effect on New Years Day, but families may not notice a difference until their 2019 tax returns.