Woohoo! Under the final tax bill President Trump is poised to sign within days, my annual tax payment would drop by about $2,100, compared with what I paid in 2016.
But I’m not planning to spend the windfall. Instead, I’ll probably save it and try to earn a respectable rate of return, so I have the money on hand in the future if Congress has to raise taxes to fill the budget hole they’re creating by cutting taxes in 2017.
House and Senate Republicans have now agreed on a final tax bill Congress seems likely to pass within days. It will sharply cut the tax rates on businesses, the most notable feature of the bill. After-tax profits seem certain to go up, a boon for anybody who owns a private business or shares in a public one.
For most individuals, tax relief will be modest. Some won’t notice much of a change. And a small but sure-to-be-vocal minority of individual taxpayers will face a tax hike.
One of the lucky ones
I’m likely to be among the lucky ones who gets a tax cut. I recalculated my 2016 taxes under the new rules, and at first, it looked like bad news. I claim two personal exemptions, one for myself and one for a child, which lowers my taxable income by $8,100. Since the new bill eliminates all personal exemptions, that would push my taxable income up.
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