The current government is supposedly in the midst of creating a new tax bill, that will hopefully ease tensions in the coming months. With the new legislation comes the quintessential idea. Will they use tax reform ideas from the past, or new innovations that have not been put in place.

The choice on whether or not to give money to the individuals and businesses that has been the choice for quite some time now, or to change the laws and effectively reform the tax policies, is a hotly debated issue.

One of the issues is whether or not the new bill when put in place, will be retroactive, or only in effect for the coming year. The taxpayers of course would like it to be retroactive, that way they see immediate change in the form of their tax returns. This is what occurred when George W. Push pushed tax cuts in 2001 and then later in 2003.

The Republican idea behind tax cuts states that with the government taking less money from the people, the people are encouraged to make more, invest more, and essentially increase the nations economy in all sectors.

While it is a solid theory, when put into place, it does not work as well as they think. With the economy currently at a 4.3% unemployment rate and a record high stock market, there does not appear to be a recession to avoid any time soon.

Lily Batchelder, a law professor at New York University stated, “With repatriation at a lower rate, you’re not only providing a tax cut for choices that have already happened, but you’re rewarding choices that involved heavy tax avoidance and gaming of the system. A lot of the reason so much money is socked away overseas is because of the ability of large multinationals to shift income on paper, so you’re kind of rewarding bad behavior.”


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Many lobbyists are stating that when money is brought back into the economy, it will be used beneficially to help create jobs and further build the economy in the country.

The new tax reform will show whether or not an old system will continue to work, or if a new system will help to bring prosperity to an already prosperous economy.