MILTON — Before the holiday season, President Donald Trump signed a tax bill that will affect people across the country.
On Dec. 22, 2017, Trump signed the Tax Cuts and Jobs Act into law after a 227-203 vote in the House of Representatives, and 51-28 in the Senate. It is the first significant reform of U.S. tax code since Ronald Regan signed tax cuts in 1986, according to CNN.
Changes include lowered tax brackets, nearly doubling the standard exemption, the personal exemption disappearing, a cap on state and local tax deduction, the expanded child credit, a new tax credit for non-child dependents, lower mortgage interest deduction, and more.
Some things will stay the same including the deduction for student loan interest, deduction of medical expenses, deduction of classroom supplies for teachers, the electric car tax credit, and more.
According to CNN, the new laws will be added to 2018 taxes, so residents need not worry about the new law when filing this tax season. Last month, Gulf Coast Accounting Services in Pace held a workshop to help residents understand the new law.
Santa Rosa County has seen changes that stem from this legislation; Walmart employees across the country earning the starting hourly wage will receive a raise to $11, according to a company press release.
The reason cited by the company: the new tax law.
Economic Development Director Shannon Ogletree said that while these changes are welcome to the community, they present challenges to area businesses.
Other big businesses may have to increase their wages to acquire and retain employees. Small businesses may have trouble competing for employees since they may not be able to offer the equivalent of Walmart’s new wages and benefits.
The new tax plan particularly affects businesses and higher-income families the most; business tax cuts are permanent under the law, while the individual cuts expire in 2025.
A study done by Yale University shows only 4 percent of CEOs said their companies plan to make large, immediate capital investments in the U.S. following tax reform. One of those companies is Walmart, which along with the raise, offered $1,000 bonuses and expanded benefits.
According to the demographic report provided by the Office of Economic Development, 25 percent of Santa Rosa County households bring in an income of $100,000 or more.
The average household income is $63,763 and 91 percent of county residents are employed.
“Residents should be receiving a bump in their pay based upon the tax bill,” Ogletree said. “The range of the bump will be based upon which tax bracket they are in.”
According to the Tax Foundation, individuals in the 95-99 percent income range would receive a 2.2 percent increase in after-tax income. Those in the 20-80 percent range would receive a 1.7 percent increase.
Those in the lowest-earning fifth of the population would see their income increase by .4 percent, according to the Tax Policy Center.
Each individual’s situation [is different], so they need to do what makes them happy with the extra cash,” Ogletree said.