Are you looking for information on the new tax laws and need it in plain English? Great, I’ve also created an 8-part video series that will be airing over the next few months! This article lays the ground work so you can better understand the 2017 Tax Cuts and Jobs Act.
On December 20th, 2017 the House approved the Tax Cuts and Job Act which is the sweeping tax reform measure that is being discussed in the media and around water coolers and bar stools everywhere. American taxpayers are both concerned and curious about how this will affect their tax bills and rightly so. Let’s take a look at the 101 for those of you who want to learn more about the basics of how tax laws are created.
Tax reform is the process of changing the way taxes are calculated, collected and managed by the government and is usually meant to make the tax system either more or less progressive, improve tax administration or provide economic or social benefits.
If you’re wondering who comes up with this stuff, there are many organizations outside of the government that have been set up to reform our tax systems. Most recommendations for new tax bills come from the President but, there are a lot of people involved in advising the President on these matters.
This advice can come from other government agencies like the IRS or people in business and professional industries.
Once the President chooses from the multiple recommendations he receives, he makes his recommendation to Congress. The US Department of Treasury is primarily responsible for drafting the President’s tax recommendations which they then send back to the President for review. Once the President and his staff have made their final revisions, it gets sent to Congress as formally proposed legislation.
Senators or State Representatives may also propose a new law which is referred to as a bill. Once Congress approves the bill and sends it to the President to be signed, it then becomes law — provided the President actually signs it.
If you find this process interesting and you’d like to learn more about how tax laws are born, check out the resource center on the US Department of Treasury website, it’s a GREAT bedtime read.
Also, be sure to visit my website at actservices-inc.com, for more valuable information about taxes and more.