Often, it’s hard to separate fact and fiction when appraising Donald Trump’s statements and core policies. After all, we’re talking about the single most polarising leader in the western world, and a man who’s policies are often viewed through a partisan and distorting lens.
This is especially true with Trump’s tax reforms, which either liberate low and middle-earners in the U.S. or provide further tax breaks for wealthy individuals and corporations in the States depending on who you speak to.
Interestingly, one of these reforms is driving an increase in the rate of divorce in the country as 2019 approaches. We’ll explore this below while asking how this trend will play out in the future.
Breaking down the Basics – What are the Details of the Reform?
On January 1st, 2019, one of Trump’s more obscure tax reforms will come into play, as divorcees will effectively begin to fund tax cuts for corporate America under the terms of brand new legislation.
More specifically, from January 1st alimony will no longer be tax-deductible by the spouse making individual payments. At the same time, the recipient of this income will no longer have to declare these payments and taxable income, creating mixed fortunes that are sure to polarise separated couples even more.
This new reform will dramatically reduce the amount of cash available for couples who are parting ways, with taxes effectively rising significantly for the spouse who’ll be required to make alimony payments.
However, those likely to receive payments may well see something of a windfall in the New Year, as their own taxable income is reduced considerably.
Why is this Triggering an Increase in the Number of Divorces?
While we’re not suggesting that spouses are now looking to seek a divorce in order to profit, there’s certainly a drive among couples already engaged in proceedings to push through their plans and conclude deals before the New Year.
After all, once the tax deduction has gone there’ll be less money available for the whole family unit, and various divorce lawyers in the States have seen the demand for their time soar in recent weeks.
Families are also keen to avoid the uncertainty created by the new legislation, particularly those who are unsure about the new reform and its precise impact on family funds.
Going forward, the first quarter of 2019 is likely to see chaos in legal offices throughout the states. After all, the highest earners in a relationship (who’ll be required to pay alimony to their spouse) may refuse to meet the new requirements, while judges may also be forced to rule on certain cases in order to clarify the new rules and set precedents.
This will definitely be a fascinating space to watch in the near-term, and it’s yet another unpredictable chapter in Trump’s premiership!