4 ways Trump's tax cuts changed the American economy

Monday is the first Tax Day under the new rules of the Tax Cuts and Jobs Act, but Americans have been adapting to the law since it passed in late 2017.

Some of its effects are already visible, and some of them will take months, or even years, to understand. After all, economists are still publishing studies about the effect of the last comprehensive tax overhaul back in 1986, signed by Ronald Reagan.

Here's what we can — and can't — say about how President Donald Trump's tax cuts have impacted the economy so far.

1. Corporate taxes fell off a cliff, fueling deeper deficits

One of the central features of the Tax Cuts and Jobs Act was a drop in the corporate income tax rate, from 35% to 21%.

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2. A short-term economic boost is fading

Most economists forecast that the tax cuts, along with a boost to military spending, would goose the economy initially. The CBO estimates that about 0.3 percentage points of the 2.9% growth in gross domestic product in 2018 can be attributed to the tax cuts.

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3. Rich people gained more than poor people

About 66% of taxpayers saw their federal tax bill decline by more than $100 in 2018, the congressional Joint Committee on Taxation reported in March. And according to the tax preparation giant H&R Block, total liabilities are down by nearly 25%. But the magnitude of those reductions varies a lot according to how much money you make, and has had the overall effect of widening income inequality in America.

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4. Most other effects: Either too soon to tell or too hard to see

The 2017 tax overhaul either pleased or dismayed a host of special interests, but it's still difficult to know whether their respective hopes or fears came true.

Take the mortgage interest deduction, which was capped at $750,000 in total amount borrowed and also weakened by the doubling of the standard deduction. Realtors worried that would put people off from buying homes — especially the most expensive ones.

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https://www.msn.com/en-us/money/markets/4-ways-trumps-tax-cuts-changed-the-american-economy/ar-BBVXhPj?li=BBnbfcN