WASHINGTON — The Tax Cuts and Jobs Act takes effect Monday, yet there are still plenty of questions regarding how the legislation will affect West Virginians.
The law, which was passed by Congress on Dec. 20 and signed into law by President Donald Trump on Dec. 22, includes changes to the individual income tax brackets, increased child tax credit and standard deduction, 21 percent corporate tax rate and how companies report foreign earnings.
Chuck O’Toole, senior executive editor of Tax Analysts, said “the vast majority” of West Virginians will see a tax cut as a result of the bill, though that is set to expire at the end of 2025.
“Where there starts to be question marks is on the long-term impact of this bill,” he said on MetroNews “Talkline.”
O’Toole continued to how individuals are likely to benefit as a result of the changes, saying the new provisions on the child tax credit and standard deduction will result in Americans keeping more of their money.
“You’re going to have a lot of people who find they have no tax liability at all now,” he said.
O’Toole said the two matters worth paying attention to regards the law’s impact on the deficit and how businesses will fare.
“The business tax changes that we are seeing here are really pretty staggering,” he said. “This is really a seismic shift for corporate businesses in the U.S.”
O’Toole added businesses have and will act in a way that will keep profits high, which could impact if finances are kept in the United States.
“That’s where the lower corporate rate will certainly help. It will make investments here by corporations more profitable and valuable. At the same time, if it helps them to have their operations based in Ireland for any given company or keep their intellectual property there as they do in many cases, they’re still going to do it,” he said.
Republican Sen. Shelley Moore Capito and Reps. David McKinley, Alex Mooney and Evan Jenkins voted for the Tax Cuts and Jobs Act. Democratic Sen. Joe Manchin voted against the bill.