Analyzing Healthcare Economics: Impact of Tax Cuts and Jobs Act

This essay examines the economic impact of the Tax Cuts and Jobs Act of 2017 on the healthcare sector in the United States. It discusses how the Act's lower corporate tax rates, reducing the highest corporate tax percentage from 39.6% to 21%, affect healthcare institutions, potentially leading to increased investments, productivity, and wage growth. The essay also addresses the potential for budgetary deficits due to reduced government revenue, which could impact healthcare service delivery. It outlines the strengths, weaknesses, opportunities, and threats associated with the tax reform, including increased personal income and healthcare accessibility versus the risk of slower expansion rates for healthcare institutions and budgetary deficits. The analysis references various sources to support its claims and provides a balanced perspective on the economic implications of the tax legislation on healthcare.

Economic Principles of Healthcare
Students Name
Institution

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Notably, with the enactment of the Tax cuts and Jobs Act, internal economic conditions of
persons and legal persons have been implemented. In the year 2017, the United States president
accented to the tax reforms (BBC News, 2017). Primarily, the Tax Cuts and Jobs Act and
Reform bill advocates for lower corporate tax rates which affect health care institutions Notably,
the tax reforms became effective as of the 1st day of January 2018 although the piece of
legislation was accented to on the 22 days of December 2017(Smith & Howard ,2018). However,
reduced taxations might encourage better health care covers and general personal wellbeing of
U.S citizens. Due to reduced taxation, there will be reduced government revenue which might
impact on the quality of health care service delivery.
Following the inception of the tax reforms, health care institutions are likely to enjoy fewer
taxation rates from 39.6% which is the usual highest corporate tax percentage to 21 percent
hence more profits for corporates within this taxation bracket (Murray, 2019). Additionally,
increased investments in health care sector owing to less taxation burden on the health care
providers may lead to increased productivity and wage growth which hand in hand lead to better
health care outcomes (York, 2018). Also, reduced taxaction on personal income will increase
personal expenditure hence the likelihood of accessing better health care treatment and covers by
patients (JP Morgan Chase, 2019). Despite the strengths of the tax reform, the likelihood of
budgetary deficits are eminent (Alexander, 2017).
Specifically, the United States of America GDP dropped from 2.9 % to2.3 % after the
enactment of the tax reforms (Gleckman, 2018). Due to the reduced taxation rates on corporate
and personal income, there is the likelihood of federal budgetary deficits which could lead to an
increase in national debt (Bryan, 2017). However, there has been increased personal income,

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increased investments and expansion of health care businesses due to increased profits arising
from a reduction in corporate taxation thus easy accessibility to quality health care.
Strengths
 Reduced corporate tax from 39.6 % to
21% for health care institutions will
lead to better equipment and better
staff hence quality health care service.
 Through mortgage interest deductions,
home ownership for most families will
afford better health care service
 Lessens personal income taxation
burden thus ability to afford better
health care covers and treatment
 Increase health care service
institutions profits
Weaknesses
 Budgetary deficits for health care
institutions due to reduced
government
Opportunities
o Owing to low corporate taxes,
investments are likely to grow hence
increased employment, profits, and
taxes for the government.
o Increased productivity for health care
Threats
 The corporate tax is a threat to the
expansion of small health care
institutions with $260000 income due
to corporate tax rates,
 Slow down expansion rate of health
care institutions due to reduced
government revenue

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service delivery
o Growth in wage rates for health care
service givers
o Increased personal income thus better
health care for patients
 Budgetary deficits due to low
government revenue hence low
personnel and equipment
References
Alexander, R. (2017).The good, bad and ugly of tax reform. Retrieved from
https://www.usnews.com/opinion/economic-intelligence/articles/2017-11-
08/the-good-bad-and-ugly-of-the-tax-cuts-and-jobs-act

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BBC News. (2017, Dec 22). Trump's tax bill: US Senate passes reform legislation. BBC News.
Retrieved from https://www.bbc.com/news/world-us-canada-42421821
Bryan, B. (2017). Here's how the newly passed GOP tax bill will impact the economy,
businesses, the deficit, and your wallet. Retrieved from
https://www.businessinsider.com/trump-gop-tax-reform-bill-impact-
economy-business-debt-income-2017-12?IR=T
Gleckman, H. (2018, May 20). Have The Trump Tax Cuts Supercharged The Economy? The
Data Don't Show It. Forbes. Retrieved from
https://www.forbes.com/sites/beltway/2018/05/02/has-the-tcja-supercharged-
the-economy-the-data-dont-show-it/#1e664ccb2549
JP Morgan Chase. (2019). 3 Economic Impacts of the Tax Cuts and Jobs Act. Retrieved from
https://commercial.jpmorganchase.com/pages/commercial-banking/executive
-connect/tax-cuts-jobs-act
Murray, J. (2019). Can My Small Business Benefit from Trump Tax Cuts? .Retrieved
fromhttps://www.thebalancesmb.com/can-small-business-benefit-from-
trump-tax-cuts-4178336
Smith & Howard. (2018).2018 Tax Cuts & Jobs Act Overview. Retrieved from
https://www.smith-howard.com/2018-tax-cuts-jobs-act-overview/
York, E. (2019).The benefits of cutting the corporate Income tax rate. Retrieved from
https://taxfoundation.org/benefits-cutting-corporate-income-tax-rate/

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