Cut back from the tax, it’s time to relax.

On Thursday, Nov 2, House Speaker Paul Ryan announced the new long-awaited proposed tax plan.

The newly proposed plan mainly affects the middle class and small business owners. There are many benefits and drawbacks of the plan. If passed, it will go in effect Jan 1, 2018.

The plan is intended to help the middle class and small business owners by decreasing the amount of taxes they’re paying. “The middle class and small business owners are the biggest recipients of the tax plan because it’s reducing their taxes. I think that’s the idea behind the tax plan is I think Trump feels like giving money back to middle Americans and small business owners is going to create more jobs at the end of the day because middle-class America if you put more money in their pockets they spend more money. If they spend more money businesses do better and if businesses do better, they grow,” said Athletic Director, Troy Barr.

Changes in taxes for businesses has many benefits but as a result effects other things. “For businesses, it is making it more appealing to open a business with the lower tax rates, but takes away some of the more favorable tax deductions like entertainment, employee fringe benefits and the domestic production activities deduction,” said Amy Knieriem, CPA, Vice President of Hart & Associates, CPAs, PSC.

Corporations are also receiving a tax cut. The corporate tax rate would go from 35 percent to 20 percent. “Although this doesn’t affect me directly, I am most excited about the corporate tax reduction. I feel a large part of American companies have moved their profits overseas because of our unfriendly high corporate tax. I feel the reduction to 20 percent is really going to bring back the big corporations and their tax dollars. This, in turn, will give our country a larger yearly revenue. This will also drive our economy and drive more business opportunities on a daily basis,” said small business owner, Terry Whitley.

This plan allows flexibility for middle-class families as far as what they spend their money on. “Based on his plan I think we will pay a little bit less in taxes my family will which will put more money in our pockets to either invest or spend on something else,” said Barr. Because taxes for the middle class are being lowered, it puts more money in those families pockets.

One concern with the plan people seem to have is if it will eventually end up making middle-class families taxes higher over time. “Its way too early to tell if our taxes will end up raising but obviously the goal for me and my family is to increase our income. In turn, we will eventually pay more taxes. As of now, we will be able to increase our income quite a bit until we enter the next tax bracket,” said Whitley.

In the newly proposed plan, they are getting rid of estate tax. “Another positive is he’s eliminating the estate tax which basically will give families the ability to build wealth,” said Barr. The plan proposes that the estate tax exemption will double. Then, after six years, the GOP wants to get rid of it entirely.

The plan also presents a new way of doing things. The idea is people will file their taxes on a tax card, then send it. “It sounds like a great, simple idea, but the government has been trying to do it for years. There would still need to be education on how to fill out the card and calculations to be done to prepare the card. We have too many complicated tax laws that benefit taxpayers to have it that simplified,” said Knieriem.

The house will vote on this proposed tax plan as soon as Thursday. If passed, it will go into action January 1, 2018.