Day 5: Permanent Lower Tax Rates—Why It Matters (And Who Should Still Be Careful)
Welcome back to our One Big Beautiful Bill Act (OBBBA) series.
Today, we’re covering one of the biggest headlines: the OBBBA makes lower individual tax rates permanent. Great news for many taxpayers—but there are still reasons to be cautious.
What Changed?
Under the 2017 TCJA:
Tax brackets were reduced across income levels.
The top marginal rate dropped from 39.6% to 37%.
These cuts were scheduled to expire after 2025, which would have meant:
Higher rates for nearly everyone
A top rate jumping back to 39.6%
Under OBBBA:
Lower tax brackets are permanent.
Top rate remains at 37%.
Who Benefits?
Middle-income taxpayers avoid higher rates in 2026.
Higher earners save significant amounts by keeping the top rate at 37%.
Families enjoy more stable tax planning.
Who Should Still Be Cautious?
High-income taxpayers may face higher effective tax rates due to phaseouts of other benefits.
Taxpayers in high-tax states might not see big savings if they can’t fully deduct state and local taxes.
Those with significant investment income may still see higher effective rates due to capital gains and surtaxes.
Why Tax Planning Matters Now More Than Ever
Lower rates are good news, but they’re only part of the picture. Tax planning helps you:
Determine the best ways to time income to stay in lower brackets.
Adjust withholding or estimated payments under the new rates.
Integrate business income strategies for maximum savings.
Coordinate investment income and deductions.
Tax planning ensures you’re not just paying less—but keeping more.
Wondering how permanent lower tax rates affect your personal or business taxes? Let’s map out your best strategy. Schedule a discovery call to explore tax planning tailored to the OBBBA.
Up next: Day 6 – Pass-Through Business Deduction Made Permanent: Great News for Small Business Owners