The Tax Cuts and Jobs Act, the new legislation introduced by the House last week, would create nearly one million new jobs and increase gross domestic product by 3.9 percent, according to an analysis from the nonpartisan Tax Foundation.
The bill cuts the corporate tax rate from 35 percent to 20 percent; reduces the number of individual tax brackets to five, which includes tax brackets of zero, 12, 25, 35 and 39.6 percent; and doubles the standard deduction. House Republicans said on Thursday that the bill would give a middle-income family of four that earns $59,000 a tax cut of about $1,182 under the proposal.
“The pro-growth tax plan would simplify the tax code by eliminating most itemized deductions, while reducing marginal tax rates,” the Tax Foundation states.
The foundation estimates the tax reform proposal would lead to 975,000 new full-time jobs created in the long run. It would also boost gross domestic product by 3.9 percent, and after-tax incomes for Americans would grow by 4.4 percent in the long run. In 10 years, the Tax Foundation estimates the average after-tax income for a middle-income family will grow by $2,598.