{{short description|U.S. federal tax legislation}} {{Use American English|date=June 2025}} {{Use mdy dates|date=December 2017}} {{Infobox United States federal legislation | name = Tax Cuts and Jobs Act | fullname = An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 | acronym = TCJA | nickname = Tax Cuts and Jobs Act<br>GOP tax reform<br>Trump tax cuts<br>Cut Cut Cut Act<ref>{{cite web|url= https://www.theatlantic.com/politics/archive/2017/11/in-defense-of-the-cut-cut-cut-act/544703/|title=The 'Cut Cut Cut Act' Is Effective Branding|first=David A.|last=Graham|date=November 1, 2017|website=The Atlantic}}</ref> | enacted by = 115th | number of co-sponsors = | cite public law = {{uspl|115|97}} | cite statutes at large = {{USStat|131|2054}} | agenciesaffected = Internal Revenue Service | acts affected = Internal Revenue Code of 1986 | leghisturl = https://www.congress.gov/bill/115th-congress/house-bill/1 | introducedin = House | introducedbill = H.R. 1 | introduceddate = November 2, 2017 | committees = House Committee on Ways and Means; passed committee on November 9, 2017, as [https://www.congress.gov/bill/115th-congress/house-bill/1 "Tax Cuts and Jobs Act"] (24–16) | introducedby = Kevin Brady (R–TX) | passedbody1 = House | passedvote1 = [http://clerk.house.gov/evs/2017/roll637.xml 227–205] | passeddate1 = November 16, 2017 | passedbody2 = Senate | passedvote2 = [https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=115&session=1&vote=00303 51–49] | passeddate2 = December 2, 2017 | conferencedate = December 15, 2017 | passedbody4 = House | passedvote4 = [http://clerk.house.gov/evs/2017/roll692.xml 227–203] [http://clerk.house.gov/evs/2017/roll699.xml 224–201] | passeddate4 = December 19, 2017 and December 20, 2017 | passedbody3 = Senate | passedas2 = Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 | passeddate3 = December 20, 2017 | passedvote3 = [https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=115&session=1&vote=00323 51–48] | signedpresident = Donald Trump | signeddate = December 22, 2017 | effective date = January 1, 2018 | amendments = One Big Beautiful Bill Act | SCOTUS cases = {{ubl|''California v. Texas'', {{ussc|docket=19-840|volume=593|year=2021}}|''Moore v. United States'', {{ussc|docket=22-800|volume=602|year=2024}}}} }} {{Donald Trump series}}
The '''Tax Cuts and Jobs Act''', {{USPL|115|97}}, is a United States federal law that amended the Internal Revenue Code of 1986, and also known as the '''Trump Tax Cuts''', but officially the law has no short title, with that being removed during the Senate amendment process.<ref name="Watkins">{{cite news |url=https://edition.cnn.com/2017/12/19/politics/tax-bill-name-delay/index.html |title=Senate rules force Republicans to go with lengthy name for tax plan |last=Watkins |first=Eli |publisher=CNN|access-date=2017-12-20}}</ref> ''The New York Times'' described the TCJA as "the most sweeping tax overhaul in decades".<ref>{{cite news|url=https://www.nytimes.com/2017/12/20/us/politics/tax-bill-republicans.html|title=House Gives Final Approval to Sweeping Tax Overhaul|work=The New York Times |last=Kaplan|first=Thomas|date=December 20, 2017}}</ref> Studies show that the TCJA worsened federal debt and increased after-tax incomes, disproportionately raising incomes for the most affluent.<ref name=":1">{{Cite journal |last1=Gale |first1=William G. |last2=Hoopes |first2=Jeffrey L. |last3=Pomerleau |first3=Kyle |date=2024 |title=Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017 |journal=Journal of Economic Perspectives |language=en |volume=38 |issue=3 |pages=3–32 |doi=10.1257/jep.38.3.3 |issn=0895-3309 |doi-access=free}}</ref> It led to an estimated 11% increase in corporate investment, but its effects on economic growth and median wages were smaller than expected and modest at best.<ref name=":12">{{Cite journal |last1=Chodorow-Reich |first1=Gabriel |last2=Zidar |first2=Owen |last3=Zwick |first3=Eric |date=2024 |title=Lessons from the Biggest Business Tax Cut in US History |journal=Journal of Economic Perspectives |language=en |volume=38 |issue=3 |pages=61–88 |doi=10.1257/jep.38.3.61 |issn=0895-3309 |doi-access=free}}</ref>
Major elements of the changes include reducing tax rates for corporations and individuals, increasing the standard deduction and family tax credits, eliminating personal exemptions and making it less beneficial to itemize deductions, limiting deductions for state and local income taxes and property taxes, further limiting the mortgage interest deduction, reducing the alternative minimum tax for individuals and eliminating it for corporations, doubling the estate tax exemption, and reducing the penalty for violating the individual mandate of the Affordable Care Act (ACA) to $0.<ref name="CBO_Senate1">{{cite web|url=https://www.cbo.gov/publication/53348|title=Reconciliation Recommendations of the Senate Committee on Finance |date=November 26, 2017 |publisher=Congressional Budget Office |access-date=July 9, 2018}}</ref><ref>{{cite book |last1=United States. Congress. Joint Committee on Taxation |title=General Explanation of Public Law 115-97 |date=2018 |publisher=U.S. Government Publishing Office |location=Washington, D.C. |url=https://purl.fdlp.gov/GPO/gpo113393 |access-date=December 19, 2018}}</ref>
Most of the changes introduced by the bill went into effect on January 1, 2018, and did not affect 2017 taxes.<ref>{{cite news|last1=Pullen|first1=John Patrick|title=Here's When the GOP Tax Reform Bill Will Take Effect|url=http://fortune.com/2017/12/20/gop-tax-bill-cuts-start/|access-date=December 23, 2017|work=Fortune|date=December 20, 2017}}</ref> Many tax cut provisions contained in the TCJA, notably including individual income tax cuts, such as the changes to the standard deduction in §63 of the IRC, were scheduled to expire in 2025 while many of the business tax cuts were set to expire in 2028.<ref>{{Cite web |last=Luhby |first=Tami |date=2024-06-13 |title=$3.4 trillion in individual tax cuts are expiring next year. Biden and Trump would handle it very differently |url=https://www.cnn.com/2024/06/13/politics/tax-cuts-expiring-trump-biden/index.html |access-date=2024-08-26 |website=CNN |language=en}}</ref><ref>{{Cite web |last=Wire |first=Sarah D. |date=August 25, 2024 |title=Harris or Trump will be busy in 2025: Next president will face these issues in office |url=https://www.usatoday.com/story/news/politics/elections/2024/08/25/harris-trump-next-president-policy-issues/74895522007/ |access-date=2024-08-26 |website=USA TODAY |language=en-US}}</ref> However, in 2025, Congress passed the One Big Beautiful Bill Act, which extends most provisions of the TCJA beyond their original expiration dates.<ref name="OBBB">{{Cite web |last=Sangal |first=Deva Lee, Leinz Vales, Maureen Chowdhury, Shania Shelton, Aditi |date=2025-07-03 |title=Live updates: House votes on Trump's 'big, beautiful bill' {{!}} CNN Politics |url=https://www.cnn.com/politics/live-news/trump-big-beautiful-bill-house-vote-07-03-25 |access-date=2025-07-03 |website=CNN |language=en}}</ref> Extending the cuts have caused economists across the political spectrum to worry it could boost inflationary pressures<ref name=":13" /><ref name=":14" /> and worsen America's fiscal trajectory.<ref name=":15" /> The Congressional Budget Office estimated that extending the expiring provisions would add $4.6 trillion in deficits over 10 years.<ref name=":16">{{Cite news |last=Bogage |first=Jacob |date=June 24, 2024 |title=The national debt is ballooning. The next president probably won't stop it. |url=https://www.washingtonpost.com/business/2024/06/24/trump-biden-national-debt/ |newspaper=Washington Post}}</ref>
==Plan elements==
===Individual income tax=== {|class="wikitable floatright" |+ Single filers (2018)<ref name="CNBC_Brackets"/> !colspan="2"|Under previous law !colspan="2"|Under TCJA |- !Rate !Income bracket !Rate !Income bracket |- |10% |$0–$9,525 |10% |$0–$9,525 |- |15% |$9,525–$38,700 |12% |$9,525–$38,700 |- |25% |$38,700–$93,700 |22% |$38,700–$82,500 |- |28% |$93,700–$195,450 |24% |$82,500–$157,500 |- |33% |$195,450–$424,950 |32% |$157,500–$200,000 |- |35% |$424,950–$426,700 |35% |$200,000–$500,000 |- |39.6% |$426,700 and up |37% |$500,000 and up |} {|class="wikitable floatright" |+ Married filing jointly (2018)<ref name="CNBC_Brackets"/> !colspan="2"|Under previous law !colspan="2"|Under TCJA |- !Rate !Income bracket !Rate !Income bracket |- |10% |$0–$19,050 |10% |$0–$19,050 |- |15% |$19,050–$77,400 |12% |$19,050–$77,400 |- |25% |$77,400–$156,150 |22% |$77,400–$165,000 |- |28% |$156,150–$237,950 |24% |$165,000–$315,000 |- |33% |$237,950–$424,950 |32% |$315,000–$400,000 |- |35% |$424,950–$480,050 |35% |$400,000–$600,000 |- |39.6% |$480,050 and up |37% |$600,000 and up |} {{See also|Income tax in the United States}} thumb|340px|US Federal marginal income tax rates: comparison of 2018, 2017, 2016 rates for individual and married filers
Under the law, there were numerous changes to the individual income tax, including changing the income level of individual tax brackets, lowering tax rates, and increasing the standard deductions and family tax credits while itemized deductions are reduced and the personal exemptions are eliminated.
Most individual income taxes are reduced, until 2025. The number of income tax brackets remain at seven, but the income ranges in several brackets have been changed and most brackets have lower rates. These are marginal rates that apply to income in the indicated range as under current law (i.e., prior Public Law 115-97 or the Act), so a higher income taxpayer will have income taxed at several different rates.<ref name="CNBC_Brackets">{{cite news | url=https://www.cnbc.com/2017/12/15/find-your-new-tax-brackets-under-the-final-gop-tax-plan.html | publisher=CNBC | first=Darla | last=Mercado | title=Find your new tax brackets under the final GOP tax plan | date=December 15, 2017 }}</ref><ref>{{cite web|url=https://www.treasury.gov/resource-center/tax-policy/Pages/Tax-Analysis-and-Research.aspx|title=Office of Tax Analysis|website=www.treasury.gov|access-date=July 9, 2018}}</ref> A different inflation measure (Chained CPI or C-CPI) will be applied to the brackets instead of the Consumer Price Index (CPI), so the brackets increase more slowly. This is effectively a tax increase over time, as people move more quickly into higher brackets as their income rises; this element is permanent.<ref name=":3">{{Cite web|url=https://www.irs.gov/pub/irs-drop/rp-16-55.pdf|title=2017 IRS Tax}}</ref><ref name=":4">{{Cite web|url=https://www.congress.gov/115/bills/hr1/BILLS-115hr1eas.pdf|title=H.R.1 — 115th Congress (2017–2018)}}</ref>
The standard deduction nearly doubles for married couples, from $12,700 to $24,000. For single filers, the standard deduction will increase from $6,350 to $12,000. About 70% of families choose the standard deduction rather than itemized deductions; this could rise to over 84% if doubled. The personal exemption is eliminated—this was a deduction of $4,050 per taxpayer and dependent, unless it is in an estate or trust.<ref name=":3" /><ref name=":4" /><ref>{{Cite web|url=https://www.congress.gov/115/bills/hr1/BILLS-115hr1eas.pdf|title=H.R.1 — 115th Congress (2017–2018) – Sec. 11041, subsection (b)}}</ref>
The child tax credit (CTC) is doubled from $1,000 to $2,000, $1,400 of which will be refundable. There is also a $500 credit for other dependents, versus zero under current law. The lower threshold for the high-income phaseout for the CTC changes from $110,000 AGI to $400,000 for married filers.<ref>{{cite web|last1=Block |first1=H&R |url=https://www.hrblock.com/tax-center/irs/tax-reform/new-child-tax-credit/|title=New Child Tax Credit: Changes for 2018|work=H&R Block |date=August 9, 2021}}</ref>
Mortgage interest deduction for newly purchased homes (and second homes) was lowered from total loan balances of $1{{nbsp}}million under current law to $750,000. Interest from home equity loans (aka second mortgages) is no longer deductible, unless the money is used for home improvements.
The deduction for state and local income tax, sales tax, and property taxes ("SALT deduction") will be capped at $10,000. This has more impact on taxpayers with more expensive property, generally those who live in higher-income areas, or people in states with higher rates for state tax.<ref>Reilly, Peter J. (January 8, 2018). "[https://www.forbes.com/sites/peterjreilly/2018/01/04/laws-of-tax-planning-updated-for-tax-cuts-and-jobs-act/#813cb685ee52 Laws Of Tax Planning Updated For Tax Cuts And Jobs Act]". ''Forbes''.</ref>
The act zeroed out the federal tax penalty for violating the individual mandate of the Affordable Care Act, starting in 2019. (In order to pass the Senate under reconciliation rules with only 50 votes, the requirement itself is still in effect).<ref>{{Cite journal|url=https://www.commonwealthfund.org/publications/fund-reports/2018/jul/eliminating-individual-mandate-penalty-behavioral-factors|title=The Effect of Eliminating the Individual Mandate Penalty and the Role of Behavioral Factors | Commonwealth Fund|website=www.commonwealthfund.org|year=2018|doi=10.26099/SWQZ-5G92|last1=Eibner|first1=Christine|last2=Nowak|first2=Sarah}}</ref> This is estimated to save the government over $300{{nbsp}}billion, because up to an estimated 13{{nbsp}}million fewer people will have insurance coverage, resulting in the government giving fewer tax subsidies. It is estimated to increase premiums on the health insurance exchanges by up to 10%.<ref name="Vox-Health">{{cite web|url=https://www.vox.com/policy-and-politics/2017/11/29/16712430/senate-tax-bill-change-federal-health-care|title=The Senate's tax bill is a sweeping change to every part of federal health care|date=November 29, 2017|access-date=July 9, 2018}}</ref> It also expands the amount of out-of-pocket medical expenses that may be deducted by lowering threshold from 10% of adjusted gross income to 7.5%, but only for 2017 (retroactively) and 2018. Effective January 1, 2019, the threshold will increase to 10%.<ref>"[https://www.capatacpa.com/medical-expense-deduction-threshold/ Tax Cuts and Jobs Act lowers medical expense deduction threshold]". ''Capata Certified Public Accountants''. 2018.</ref>
No changes are made to major education deductions and credits, or to the teacher deduction for unreimbursed classroom expenses, which remains at $250. The bill initially expanded usage of 529 college savings accounts for both K–12 private school tuition and homeschools, but the provision regarding homeschools was overruled by the Senate parliamentarian and removed. The 529 savings accounts for K-12 private school tuition provision was left intact.<ref>Egger, Andrew (December 19, 2017). "[https://web.archive.org/web/20171222082348/http://www.weeklystandard.com/updated-house-passes-tax-reform-but-will-have-to-revote/article/2010897 House Passes Tax Reform, But Will Have to Revote]". ''The Weekly Standard''. Retrieved December 20, 2017.</ref>
Taxpayers will only be able to deduct a casualty loss if it occurs in a federally declared disaster area.<ref>McRuer, Scott (February 9, 2018). "[http://blog.kccpa.com/blog/2018/02/new-tax-law-cuts-personal-casualty-loss-deduction.html New Tax Law Cuts Personal Casualty Loss Deduction]". ''McRuer CPAs''.</ref>
Alimony paid to a former spouse will no longer be deductible by the payer, and alimony payments will no longer be included in the recipient's gross income. This effectively shifts the tax burden of alimony from the recipient to the payer, increases the amount of tax collected on the income transferred as alimony, and simplifies the audit trail for the IRS.{{citation needed|date=January 2022}} This provision is effective for divorce and separation agreements signed after December 31, 2018.<ref>Rickert, Kelly Chang (January 4, 2018). "[https://www.purposedrivenlawyers.com/tax-reform-2018-and-alimony/ Tax Cuts and Jobs Act and Alimony After 2018]". ''Law and Mediation Offices of Kelly Change, PLC''.</ref>
Employment-related moving expenses will no longer be deductible, except for moves related to active-duty military service.<ref>Swavely, Lauren (February 7, 2018). "[http://www.herbein.com/blog/tax-cuts-and-jobs-act-significant-changes-to-moving-expense-deductions Tax Cuts and Jobs Act – Significant Changes to Moving Expense Deductions]". ''Herbein + Company, Inc''.</ref>
The miscellaneous itemized deduction, including tax-deductions for tax-preparation fees, investment expenses, union dues, and unreimbursed employee expenses, are eliminated.<ref>Kocher, Chris (January 19, 2018). "[http://lcitaxes.com/lciblog/lciblog/?permalink=tax-cuts-and-jobs-act--miscellaneous-itemized-deductions Tax Cuts and Jobs Act ... Miscellaneous Itemized Deductions] {{Webarchive|url=https://web.archive.org/web/20180508185635/http://lcitaxes.com/lciblog/lciblog/?permalink=tax-cuts-and-jobs-act--miscellaneous-itemized-deductions |date=May 8, 2018 }}". ''LCI Taxes, LLC''.</ref>
Fewer people will pay the Alternative minimum tax because the act increases the exemption level from $84,500 to $109,400 for married taxpayers filing jointly and from $54,300 to $70,300 for single taxpayers.<ref>Sahadi, Jeanne (December 22, 2017). "[https://web.archive.org/web/20171216030246/http://money.cnn.com/2017/12/15/news/economy/gop-tax-plan-details/index.html What's in the GOP's final tax plan]". ''CNN''.</ref>
The act repeals the ability to recharacterize Roth conversions.<ref>"[https://www.kitces.com/blog/final-gop-tax-plan-summary-tcja-2017-individual-tax-brackets-pass-through-strategies/ Final GOP Tax Plan Summary: Tax Strategies Under TCJA 2017]". ''Nerd's Eye View''. December 18, 2017. Retrieved December 29, 2017.</ref><ref>"[https://www.lexology.com/library/detail.aspx?g=672f54d0-4d22-4d8d-8eda-dac57b1a30cc The Tax Cuts and Jobs Act of 2017]". ''Lexology''. December 22, 2017. Retrieved December 29, 2017.</ref>
The act exempts the discharge of certain student loans due to the death or total permanent disability of the borrower from taxable income. This provision applies only to debt discharged during tax years 2018 through 2025.<ref>{{cite web|url=https://specialneedsanswers.com/discharged-student-loan-debt-no-longer-taxable-under-new-tax-law-16501 |title=Discharged Student Loan Debt No Longer Taxable Under New Tax Law |date=January 4, 2018 |publisher=Special Needs Answers |access-date=April 17, 2018}}</ref><ref>{{cite press release|url=https://www.king.senate.gov/newsroom/press-releases/king-portman-coons-urge-administration-to-immediately-discharge-outstanding-loans-for-families-suffering-from-childs-death-or-permanent-disability |title=King, Portman, Coons Urge Administration to Immediately Discharge Outstanding Loans for Families Suffering from Child's Death or Permanent Disability |publisher=Office of Senator Angus King |date=February 28, 2018 |access-date=April 18, 2018}}</ref>
The act now taxes survivors benefits that were allocated to the children of a deceased military service member as if they were for a trust or estate, which can subject them to an income tax rate of up to 37%.<ref>Clark, James (April 23, 2019). "[https://taskandpurpose.com/trump-tax-cut-widows Trump's tax cut was a disaster for some Gold Star families, but it's a symptom of a larger problem] {{Webarchive|url=https://web.archive.org/web/20190423174712/https://taskandpurpose.com/trump-tax-cut-widows |date=April 23, 2019 }}". ''Task & Purpose''.</ref>
===Estate tax=== {{See also|Estate tax in the United States}} For deaths occurring between 2018 and 2025, estates that exceed $11.2{{nbsp}}million are subject to a 40% estate tax at time of death, increased from $5.6{{nbsp}}million previously. For a married couple aggregating their exemptions, an estate exceeding $22.4{{nbsp}}million is subject to a 40% estate tax at time of death.<ref>Borchers, Tim (January 14, 2018). "[http://www.borcherslaw.com/estate-gift-taxes-2018-tax-law/ Estate and Gift Taxes Under the New 2018 Tax Law]". ''Borchers Trust Law Group, PC''.</ref>
===Corporate tax=== {{See also|Corporate tax in the United States|Double Irish arrangement#Effect of Tax Cuts and Jobs Act|Ireland as a tax haven}} The corporate tax rate was changed from a tiered tax rate ranging from 15% to as high as 39% depending on taxable income<ref>{{Cite web|url=https://www.irs.gov/pub/irs-prior/i1120--2017.pdf|title=IRS 2017 Instructions for Form 1120}}</ref> to a flat 21%, while some related business deductions and credits were reduced or eliminated. The Act also changed the U.S. from a global to a territorial tax system with respect to corporate income tax. Instead of a corporation paying the U.S. tax rate for income earned in any country (less a credit for taxes paid to that country), each subsidiary pays the tax rate of the country in which it is legally established. In other words, under a territorial tax system, the corporation saves the difference between the generally higher U.S. tax rate and the lower rate of the country in which the subsidiary is legally established. ''Bloomberg'' journalist Matt Levine explained the concept, "If we're incorporated in the U.S. [under the old global tax regime], we'll pay 35 percent taxes on our income in the U.S. and Canada and Mexico and Ireland and Bermuda and the Cayman Islands, but if we're incorporated in Canada [under a territorial tax regime, proposed by the Act], we'll pay 35 percent on our income in the U.S. but 15 percent in Canada and 30 percent in Mexico and 12.5 percent in Ireland and zero percent in Bermuda and zero percent in the Cayman Islands."<ref name="Levine20142">Levine, Matt (August 25, 2014). "[http://www.bloombergview.com/articles/2014-08-25/burger-king-may-move-to-canada-for-the-donuts Burger King May Move to Canada for the Donuts] {{Webarchive|url=https://web.archive.org/web/20160417055413/http://www.bloombergview.com/articles/2014-08-25/burger-king-may-move-to-canada-for-the-donuts |date=April 17, 2016 }}". ''Bloomberg''.</ref> In theory, the law would reduce the incentive for tax inversion, which is used today to obtain the benefits of a territorial tax system by moving U.S. corporate headquarters to other countries.<ref name= Korving>Korving, Stephen (January 2, 2018). "[https://pilotonline.com/inside-business/news/columns/article_beb398d9-e843-52d6-ac02-b97f70572d05.html How tax cuts and job act will affect you and your business] {{Webarchive|url=https://web.archive.org/web/20180509012607/https://pilotonline.com/inside-business/news/columns/article_beb398d9-e843-52d6-ac02-b97f70572d05.html |date=May 9, 2018 }}". ''Inside Business''. The Hampton Roads Business Journal.</ref>
One-time repatriation tax of profits in overseas subsidiaries is taxed at 8%, 15.5% for cash. U.S. multinationals have accumulated nearly $3{{nbsp}}trillion offshore, much of it subsidiaries in tax-haven countries. The Act may encourage companies to bring the money back to the U.S. at these much lower rates.<ref name="NYT_WL1">{{cite news | first1=Jesse | last1=Drucker | first2=Alan | last2=Rappeport | title=The Tax Bill's Winners and Losers | work=The New York Times | date=December 16, 2017 | url=https://www.nytimes.com/2017/12/16/business/the-winners-and-losers-in-the-tax-bill.html | access-date=July 15, 2019}}</ref><ref name="NYT_Whatsin">{{cite news | last1=Andrews | first1=Wilson | last2=Parlapiano | first2=Alicia | title=What's in the Final Republican Tax Bill | work=The New York Times | date=December 15, 2017 | url=https://www.nytimes.com/interactive/2017/12/15/us/politics/final-republican-tax-bill-cuts.html | access-date=July 15, 2019}}</ref>
The Corporate Alternative Minimum Tax was eliminated.<ref name= Korving/>
The law also eliminated the net operating loss carryback, a procedure by which a company with significant losses could receive a tax refund by counting the losses as part of the previous year's tax return. They were considered important in providing liquidity during a recession. The provision was cut in order to finance the tax cuts in the act, and was one of the largest offsets in the law.<ref>{{cite web|url=https://www.politico.com/news/2020/03/16/republicans-tax-overhaul-recession-worse-132286|title=How Republicans' tax overhaul could make a recession worse|last=Faler|first=Brian|date=2020-03-16|website=Politico|language=en|access-date=2020-03-16}}</ref>
Additionally, the domestic production activities deduction was eliminated by the Tax Cuts and Jobs Act.<ref>{{Cite web |last=Perez |first=William |date=2022-02-08 |title=An Overview of the Domestic Production Activities Deduction |url=https://www.thebalance.com/domestic-production-activities-deduction-3192986 |access-date=2022-08-10 |website=The Balance |language=en}}</ref>
=== Churches and nonprofit organizations ===
==== Employee compensation ==== There is a 25% excise tax on compensation paid to certain employees of churches and other tax-exempt organizations.<ref name= cla-excise>Davis, Kelly (April 19, 2019). "[https://www.claconnect.com/resources/articles/2019/irs-guidance-clarifies-new-excise-tax-on-nonprofit-executive-compensation IRS Guidance Clarifies New Excise Tax on Nonprofit Executive Compensation]". ''CliftonLarsonAllen LLP''.</ref> The excise tax applies to any organization that is tax-exempt under 501(c) or 501(d), a Section 521(b)(1) farmer's cooperative, Section 527 political organizations, and organizations that have Section 115(1) income that is earned by performing essential government functions.<ref name= n-10-09>"[https://www.irs.gov/pub/irs-drop/n-19-09.pdf Notice 2019-09]". ''Internal Revenue Service''. December 31, 2018.</ref>
The excise tax applies to compensation paid to certain employees in excess of $1,000,000 during the year. The employees covered under this rule are the organization's five highest-compensated employees and any employees who previously had this status after 2016.<ref name= n-10-09/> Compensation is exempt from the excise tax if the compensation is paid to medical doctors, dentists, veterinarians, nurse practitioners, and other licensed professionals providing medical or veterinary services. Compensation includes all current compensation, qualifying deferred compensation, non-qualifying deferred compensation without substantial risk of forfeiture, income under Section 457(f), and severance payments, but excluding Roth retirement contributions.<ref>"[https://www.law.cornell.edu/uscode/text/26/4960 26 U.S. Code § 4960 – Tax on excess tax-exempt organization executive compensation]". ''Internal Revenue Service''. Legal Information Institute. Cornell University. 2017. Retrieved July 11, 2018.</ref><ref name= grfcpa/><ref>"[https://www.cbh.com/guide/tcjas-excise-tax-remuneration-in-excess-of-1000000-and-excess-parachute-payments/ TCJA's Excise Tax: Remuneration in Excess of $1,000,000 and Excess Parachute Payments] {{Webarchive|url=https://web.archive.org/web/20190112150023/https://www.cbh.com/guide/tcjas-excise-tax-remuneration-in-excess-of-1000000-and-excess-parachute-payments/ |date=January 12, 2019 }}". ''Cherry Bekaert LLP''. January 10, 2019.</ref>
An organization may also be subject to the 21% excise tax if an organization has a deferred compensation plan in which benefits are spread over several years and then vest all at once.<ref name= MoranLewinConstantine>Moran, Christopher N.; Lewin, Cynthia M.; Constantine, George E. (April 24, 2019). "[https://www.venable.com/insights/publications/2019/04/new-excise-tax-on-nonprofit-compensation-casts New Excise Tax on Nonprofit Compensation Casts Wide Net]". ''Venable LLP''</ref> Severance payments exceeding triple an employee's average salary during the last five years may also be subject to the 21% excise tax.<ref name= MoranLewinConstantine/>
==== University investment tax ==== There is a 1.4% excise tax on investment income of certain private tax-exempt colleges and universities. The excise tax applies only if the institution has at least 500 tuition-paying students and more than half the students are located in the United States. The excise tax applies if the institution and its related organizations have an endowment with an aggregate fair-market value at the end of the preceding tax year of at least $500,000 per full-time student, excluding assets used directly in carrying out institution's tax-exempt purpose.<ref>"[https://www.irs.gov/pub/irs-drop/n-18-55.pdf Notice 2018–55: Guidance on the Calculation of Net Investment Income for Purposes of the Section 4968 Excise Tax Applicable to Certain Private Colleges and Universities]". ''Internal Revenue Service''. 2018.</ref><ref name= grfcpa>"Update on Tax Reform and the Impact on Tax-Exempt Organizations". ''Gelman, Rosenberg & Freedman CPAs''. July 10, 2018.</ref>
This provision has been referred to as an endowment tax, and it has been estimated that it applies to around 32 universities.
Some provisions from the earlier House bill were dropped that would have taxed graduate student tuition waivers, tuition benefits for children and spouses of employees, and student loan interest.<ref>{{cite news|url=https://www.insidehighered.com/news/2017/12/18/large-endowments-would-be-taxed-under-final-gop-tax-plan|title=Large endowments would be taxed under final GOP tax plan|last=Kreighbaum|first=Andrew|date=December 18, 2017 |work=Inside Higher Ed|access-date=December 19, 2017 }}</ref> A Senate Parliamentarian ruling on December 19 changed the exemption threshold from 500 tuition-paying students to 500 total students.<ref>{{cite news|url=http://www.businessinsider.com/house-vote-on-trump-republican-tax-reform-bill-senate-byrd-rule-2017-12|title=The House will be forced to revote on the massive tax bill because of provisions that break Senate rules|last=Bryan|first=Bob|date= December 19, 2017 |work=Business Insider |access-date= December 19, 2017 }}</ref> Endowment funds used to carry out a college's tax-exempt purpose are excluded from the asset threshold, but Internal Revenue Service has not issued regulations specifically defining this term.<ref>{{Cite news|url=https://www.politico.com/story/2017/12/22/harvard-tax-college-endowments-252892|title=The new tax on Harvard|last1=Stratford|first1=Michael|date= December 22, 2017 |work=Politico|access-date=December 25, 2017 |last2=Wermund|first2=Benjamin}}</ref>
In addition, a tax deduction is now disallowed entirely for charitable contributions if the donor receives rights to receive seats to college athletic events.<ref name= grfcpa/> Formerly, 80% of the charitable contribution was considered to be a tax-deductible charitable contribution.<ref name =grfcpa/>
==== Parking and public transportation provided to employees ==== Unrelated business income is now increased by the amount a church or other tax-exempt organization pays or incurs for qualifying parking or qualifying transportation benefits for its employees. This type of unrelated business income includes only tax-free transportation benefits provided to employees, not transportation benefits that are included in the employee's taxable wages.<ref name=n-18-99>"[https://www.irs.gov/pub/irs-drop/n-18-99.pdf Notice 2018–99]". ''Internal Revenue Service''. December 10, 2018.</ref>
Unrelated business income does not result if the employer provides free parking for employees, the majority of the parking spaces are available to the general public during the organization's normal business hours, and none of the parking spots reserved for its employees.<ref name=n-18-99/> If some parking spots are reserved for employees, then unrelated business income results from a portion of the total parking expenses, based on the percentage of parking spots that are reserved for its employees.<ref name=n-18-99/>
The Internal Revenue Service has clarified that the employer should use a reasonable method to determine the value of parking benefits provided to its employees.<ref name=n-18-99/> The value of the parking spaces should include repairs, maintenance, utility costs, insurance, property taxes, interest, snow and ice removal, leaf removal, trash removal, cleaning, landscape costs, parking attendant expenses, security, and rent or lease payments, but not depreciation expense.<ref name=n-18-99/>
A church or other tax-exempt organization would need to file Form 990-T and pay unrelated business income tax if its total unrelated business income exceeds $1,000 during the fiscal year.<ref name=n-18-99/><ref>"[https://www.irs.gov/newsroom/irs-issues-guidance-for-determining-nondeductible-amount-of-parking-fringe-expenses-and-unrelated-business-taxable-income-provides-penalty-relief-to-tax-exempt-organizations IRS issues guidance for determining nondeductible amount of parking fringe expenses and unrelated business taxable income; provides penalty relief to tax-exempt organizations]". ''Internal Revenue Service''. December 10, 2018.</ref> Netting the unrelated business income from transportation with other unrelated business income in order to reduce or eliminate the amount of tax due is allowed.<ref name=n-18-99/>
Some states and jurisdictions require all employers to provide these benefits to their employees, which may result in an organization being required to choose between paying unrelated business income tax to the federal government or being in noncompliance with state and local laws.<ref name= grfcpa/>
==== Unrelated business income ==== Unrelated business income is now separately computed for each trade or business activity of the church or other tax-exempt organization. Losses on one trade or business can no longer be used to offset gains on another trade or business for unrelated business income purposes. Net operating losses generated before January 1, 2018, and carried forward to other tax years are not affected and can be used to offset gains from any trade or business activity. Some affected organizations are considering incorporating for-profit subsidiaries and then moving all unrelated business income to the for-profit subsidiaries, which might make all the unrelated business income count as the same category of trade or business activity, namely "income from for-profit subsidiaries".<ref>"[https://www.law.cornell.edu/cfr/text/26/1.513-1 26 CFR 1.513-1 – Definition of unrelated trade or business]". ''Internal Revenue Service''. Legal Information Institute. Cornell University. 2017. Retrieved July 11, 2018.</ref><ref name= grfcpa/> Unrelated business taxable income from transportation benefits is not considered a trade or business activity and will be applied after totaling all of the organization's unrelated business income overall.<ref name= nfp2018/><ref>"[https://www.maloneynovotny.com/featured-news/notice-2018-67/ IRS Releases Notice 2018–67 Guidance on Separating UBI Activities] {{Webarchive|url=https://web.archive.org/web/20180830073818/https://www.maloneynovotny.com/featured-news/notice-2018-67/ |date=August 30, 2018 }}". ''Maloney + Novotny, LLC''. August 27, 2018.</ref><ref>"[https://www.irs.gov/pub/irs-drop/n-18-67.pdf IRS Notice 2018–67]". ''Internal Revenue Service''. August 21, 2018.</ref>
Net operating losses are now limited to 80% of taxable income for tax years beginning after December 31, 2017.<ref name= nfp2018/> Unrelated business income tax is now assessed at the flat rate of 21%, rather than at a graduated tax rate, except for unrelated business income earned on or before December 31, 2017.<ref>"[https://www.irs.gov/pub/irs-drop/n-18-38.pdf Note 2018–38: 2018 Fiscal-year Blended Tax Rates for Corporations]". ''Internal Revenue Service''. 2018.</ref><ref name= grfcpa/> Net operating losses for tax years ending after December 31, 2017, may now be carried forward to future tax years indefinitely.<ref name= nfp2018>"Not-For-Profit Tax Update". ''Cherry Bekaert LLP''. August 29, 2018.</ref>
==== Charitable contributions ==== More individuals will choose to take the standard deduction rather than itemize their tax deductions because of the increase in standard deduction and limitation on itemized deduction for state and local taxes. As a result, these individuals will not see a tax savings from donations to churches or other eligible nonprofit organizations, and churches and other organizations may receive fewer charitable contributions.<ref name= grfcpa/><ref>Burgess, Patti Brandt (July 15, 2018). "Donation decisions: To give or not to give in new tax era". ''The Tribune-Democrat'' (Johnstown, Pennsylvania).</ref><ref>Harding, Hayley (July 1, 2018). "Report: Charitable Donations On Rise In State But Number Of People Giving Falls". ''The Hartford Courant'' (Hartford, Connecticut). p. 4B.</ref><ref>Pender, Kathleen (May 20, 2018). "State lags on foiling tax deductions cap". ''San Francisco Chronicle''. p. D1.</ref>
The indexed estate tax exemption was doubled, which means that people may not need to include charitable contributions being written into their will in order to reduce the estate tax paid, which is expected to reduce the amount of charitable contributions given to churches and nonprofit organizations overall.<ref name= grfcpa/>
==== Tax credit for paid family and medical leave ==== The Tax Cuts and Jobs Act of 2017 allows a tax credit for employers that provide paid family and medical leave to employees. A 501(c)(3) organization is not eligible for the tax credit.<ref name= notice2018-71>"[https://www.irs.gov/pub/irs-drop/n-18-71.pdf Notice 2018–71]". ''Internal Revenue Service''. September 24, 2018.</ref>
===Miscellaneous tax provisions=== {{Update|section|date=December 2017}}
The Act contains a variety of miscellaneous tax provisions, many advantaging particular special interests.<ref name="PetullaHansler">Sam Petulla & Jennifer Hansler, [http://www.cnn.com/2017/11/15/politics/senate-tax-bill-amendments-special-interests-industry-groups/index.html Sparkling wine, jets, the unborn and other special-interest wins in the tax bill], CNN (November 16, 2017).</ref> Miscellaneous provisions include: * Internal Revenue Code section 1031, which allowed the deferment of capital gains taxes on so-called "like-kind exchanges" of a wide array of real, personal, and business property, was maintained for real property but repealed for other types of property.<ref>{{cite news|url=https://www.nytimes.com/2018/03/19/us/politics/baseball-tax-law-.html|title=A Curveball From the New Tax Law: It Makes Baseball Trades Harder|first=Jim|last=Tankersley|newspaper=The New York Times|date=March 19, 2018|access-date=March 20, 2018}}</ref> * A tax break for citrus growers,<ref name="Vinik">{{cite news|url=https://www.politico.com/agenda/story/2017/11/16/easter-eggs-hidden-in-senate-tax-bill-000583/|publisher=Politico|first=Danny|last=Vinik|title=The Easter eggs hidden in the new Senate tax bill|date=November 16, 2017}}</ref> allowing them to deduct the cost of replanting "citrus plants lost or damaged due to causes like freezing, natural disaster or disease."<ref name="PetullaHansler"/> * The extension of "full expensing," a favorable tax treatment provision for film and television production companies, to 2022. The provision allows such companies "to write-off the full cost of their investments in the first year." The Joint Committee on Taxation estimates that the extension will lead to the loss of about $1{{nbsp}}billion in federal revenue per year.<ref name="Vinik"/> * A provision ending a corporate tax exemption for certain international airlines with commercial flights to the United States (specifically, in cases where "the country where the foreign airline is headquartered doesn't have a tax treaty with the U.S., and if major U.S. airliners make fewer than two weekly trips to that foreign country"). This provision is seen as likely to disadvantage Gulf airlines (such as Etihad, Emirates and Qatar Airways); major U.S. airlines have complained that the Gulf states provide unfair subsidies to those carriers.<ref name="Vinik"/> * Reductions in excise taxes on alcohol for a two-year period.<ref name="Smith">Aaron Smith, [https://web.archive.org/web/20171116134656/http://money.cnn.com/2017/11/16/news/beer-wine-whiskey-tax/index.html Cheers! Senators propose lowering alcohol tax], CNN (November 16, 2017).</ref> The Senate bill would reduce the tax on "the first 60,000 barrels of beer produced domestically by small brewers" from $7 to $3.50 and would reduce the tax on the first 6{{nbsp}}million barrels produced from $18 to $16 per barrel.<ref name="Vinik"/> The Senate bill would also extend a tax credit on wine production to all wineries and would extend the credit to the producers and importers of sparkling wine as well.<ref name="PetullaHansler"/> These provisions were supported by the alcohol lobby, specifically the Beer Institute, Wine Institute, and Distilled Spirits Council.<ref name="Smith"/> * Exempts private jet management companies from the 7.5% federal excise tax that is levied on tickets for commercial flights.<ref>{{cite news|url=https://www.independent.co.uk/news/world/americas/us-politics/tax-bill-senate-private-jet-owners-donald-trump-break-vote-bill-latest-a8088226.html |archive-url=https://ghostarchive.org/archive/20220526/https://www.independent.co.uk/news/world/americas/us-politics/tax-bill-senate-private-jet-owners-donald-trump-break-vote-bill-latest-a8088226.html |archive-date=May 26, 2022 |url-access=subscription |url-status=live|work=The Independent|first=Alex|last=Matthews-King|title=Private jet owners handed tax break in major Senate victory for Republicans|date=December 2, 2017}}</ref><ref>{{cite news|first=Tiffany|last=Hsu|url=https://www.nytimes.com/2017/11/17/business/senate-tax-private-jet.html|title=Senate Tax Plan Includes Exemption for Private Jet Management|work=The New York Times|date=November 17, 2017}}</ref> * A late change to the bill created what came to be called the "grain glitch", which altered an existing deduction for U.S. production in a way that allowed farmers to deduct 20% of their total sales to agricultural cooperatives. According to ''The New York Times'', this "caused an uproar among independent agriculture businesses that say they can no longer compete with cooperatives."<ref name="NYT 2018-03-11">{{cite news|url=https://www.nytimes.com/2018/03/11/us/politics/tax-cut-law-problems.html|title=G.O.P. Rushed to Pass Tax Overhaul. Now It May Need to Be Altered|first1=Jim|last1=Tankersley|first2=Alan|last2=Rappeport|newspaper=The New York Times|date=March 11, 2018|access-date=March 20, 2018}}</ref> This glitch was corrected by the Consolidated Appropriations Act, 2018.<ref>Werner, Erica; DeBonis, Mike (March 22, 2018). "[https://www.washingtonpost.com/powerpost/house-prepares-for-rapid-vote-today-on-jam-packed-13-trillion-spending-deal/2018/03/22/2074fe7e-2dd6-11e8-8688-e053ba58f1e4_story.html House approves jam-packed $1.3 trillion spending bill]". ''The Washington Post''. {{ISSN|0190-8286}}. Retrieved March 23, 2018.</ref> * Because of a drafting error, businesses making renovations or other improvements must now use a 39-year depreciation schedule for the cost of these improvements instead of the intended 15-year period, which reduces allowable business tax deductions each year.<ref name="NYT 2018-03-11"/> * The creation of opportunity zones, allowing for tax advantages for investments in low-income areas.<ref name="NYT20180129">{{cite news |last1=Tankersley |first1=Jim |title=Tucked Into the Tax Bill, a Plan to Help Distressed America |newspaper=The New York Times |url=https://www.nytimes.com/2018/01/29/business/tax-bill-economic-recovery-opportunity-zones.html |access-date=December 3, 2018 |date=January 29, 2018 }}</ref>
===Arctic National Wildlife Refuge drilling=== The Act contains provisions that would open {{convert|1.5|e6acre|km2|abbr=unit}} in the Arctic National Wildlife Refuge to oil and gas drilling.<ref name="ShankmanDec2">{{cite news | url=https://insideclimatenews.org/news/01122017/tax-bill-gop-arctic-national-wildlife-refuge-oil-drilling-anwr-murkowski-curbelo-republican-opposition | work=InsideClimate News | first=Sabrina | last=Shankman | title=12 House Republicans Urge Congress to Cut ANWR Oil Drilling from Tax Bill | date=December 2, 2017 }}</ref><ref>{{cite news|url=https://www.bloomberg.com/news/articles/2017-12-19/tax-bill-opens-arctic-refuge-for-oil-years-of-delay-may-follow|title=Tax Bill Opens Arctic Refuge for Oil, But Years of Delay May Follow|last1=Natter|first1=Ari|date=2017-12-19|work=Bloomberg L.P.|access-date=2017-12-20|last2=Dlouhy|first2=Jennifer A.}}</ref> This major push to include this provision in the tax bill came from Republican Senator Lisa Murkowski.<ref name="Detrow">Scott Detrow, [https://www.npr.org/2017/11/18/564909626/senate-may-approve-drilling-in-alaskan-wilderness-with-tax-bill Senate May Approve Drilling In Alaskan Wilderness With Tax Bill], NPR (November 18, 2017).</ref><ref name="Solomon">{{cite news | url=https://www.outsideonline.com/2262311/drilling-crown-jewel-arctic-refuge-grows-closer | work=Outside | first=Christopher | last=Solomon | title=The ANWR Drilling Rights in the Tax-Reform Bill | date=November 16, 2017 }}</ref><ref name="ShankmanNov16">{{cite news | url=https://insideclimatenews.org/news/15112017/anwr-arctic-national-wildlife-refuge-oil-drilling-alaska-murkowski | work=InsideClimate News | first=Sabrina | last=Shankman | title=At Stake in Arctic Refuge Drilling Vote: Money, Wilderness and a Way of Life | date=November 16, 2017 }}</ref> The move is part of the long-running Arctic Refuge drilling controversy; Republicans had attempted to allow drilling in ANWR almost 50 times.<ref name="Solomon"/> Opening the Arctic Refuge to drilling "unleashed a torrent of opposition from conservationists and scientists."<ref name="ShankmanNov16"/> Democrats<ref name="Detrow"/><ref name="Solomon"/> and environmentalist groups such as the Wilderness Society criticized the Republican effort.<ref name="Solomon"/>
== Legislative history == The bill was introduced in the House of Representatives on November 2, 2017, by Congressman Kevin Brady (R-Texas). On November 9, 2017, the House Ways and Means Committee passed the bill on a party-line vote, advancing the bill to the House floor.<ref name="Hughes">{{cite news |last=Hughes |first=Siobhan |date=November 9, 2017 |title=House Ways and Means Committee Approves GOP Tax Bill |newspaper=The Wall Street Journal |url=https://www.wsj.com/livecoverage/tax-bill-2017/card/1510259324}}</ref> The House passed the bill on November 16, 2017, on a mostly-party line vote of 227–205. No Democrat voted for the bill, while 13 Republicans voted against it.<ref name="NYTimesHouse">{{cite news |date=November 16, 2017 |title=$1.5 Trillion Tax Cut Passed by House in Mostly Party-Line Vote |work=The New York Times |url=https://www.nytimes.com/2017/11/16/us/politics/tax-bill-house-vote.html}}</ref><ref name="CRFBHouse">[http://www.crfb.org/press-releases/house-passes-historic-debt-increase House Passes Historic Debt Increase] (press release), House Passes Historic Debt Increase (November 16, 2017).</ref> On the same day, companion legislation passed the Senate Finance Committee, again on a party-line vote, 14–12.<ref name="Faler">{{cite news |last=Faler |first=Brian |date=November 16, 2017 |title=Senate Finance Committee approves GOP tax reform plan |publisher=Politico |url=https://www.politico.com/story/2017/11/16/senate-tax-bill-committee-246537}}</ref> On November 28, the legislation passed the Senate Budget Committee, again on a party-line vote.<ref name="KimSBC">Seung Min Kim, Colin Wilhelm and Bernie Becker, [https://www.politico.com/story/2017/11/28/senate-tax-votes-gop-192794 Senate GOP gets breathing room as tax plan advances], ''Politico'' (November 28, 2017).</ref> In the early morning hours of December 2, 2017, the Senate passed its version of the bill by a 51–49 vote. Bob Corker (R–Tennessee) was the only Republican senator to vote against this version of the bill and it received no Democratic Party support.<ref>{{cite news |title=Senate passes huge tax cuts after last-minute changes; conference with House next |work=USA TODAY |url=https://www.usatoday.com/story/news/politics/2017/12/01/senate-passes-huge-tax-cuts-after-last-minute-changes-conference-house-next/914701001/ |access-date=2017-12-02}}</ref>
Differences between the House and Senate bills were reconciled in a conference committee that signed the final version on December 15, 2017. The final version contained relatively minor changes from the Senate version.<ref name="Hill_Final1">{{cite web |last=Weaver |first=Dustin |date=December 15, 2017 |title=Republicans unveil final version of tax bill |url=https://thehill.com/policy/finance/365177-republicans-release-final-version-of-tax-bill/ |access-date=July 9, 2018}}</ref> The House passed the penultimate version of the bill on December 19, 2017.<ref name="nyt-senate">{{cite news |last1=Rappeport |first1=Alan |last2=Kaplan |first2=Thomas |date=December 19, 2017 |title=Republican Tax Bill Passes Senate in 51-48 Vote |work=The New York Times |url=https://www.nytimes.com/2017/12/19/us/politics/tax-bill-vote-congress.html |access-date=December 20, 2017}}</ref> In the December 19 vote, the same Republicans who voted against the original House bill still voted against it (with the exception of Tom McClintock, who voted in favor on December 19 after having voted against the original House bill).<ref name="Tatum">{{cite news |last1=Tatum |first1=Sophie |date=December 19, 2017 |title=These are the Republicans who voted 'no' on the tax bill |publisher=CNN |url=http://www.cnn.com/2017/12/19/politics/republicans-tax-vote/index.html |access-date=December 19, 2017}}</ref> However, several provisions of the bill violated the Senate's procedural rules, which meant that the House of Representatives needed to re-vote with the objectionable provisions removed.<ref name="Faler 2">{{cite web |last1=Faler |first1=Brian |date=December 19, 2017 |title=House passes tax overhaul, teeing up final Senate vote |url=https://www.politico.com/story/2017/12/19/congress-tax-bill-votes-304908 |access-date=December 19, 2017 |publisher=Politico}}</ref> The Senate passed the final bill, 51–48, on December 20, 2017; all Senate Republicans voted for the bill except Sen. John McCain, who was absent for health reasons.<ref>{{cite news |last1=Lee |first1=Jasmine C. |last2=Simon |first2=Sara |date=December 19, 2017 |title=How Every Senator Voted on the Tax Bill |work=The New York Times |url=https://www.nytimes.com/interactive/2017/12/19/us/politics/tax-bill-senate-live-vote.html}}</ref> On the same day, a re-vote was held in the House; the bill passed with a vote of 224–201.<ref>{{cite news |last=Kaplan |first=Thomas |date=December 20, 2017 |title=House Gives Final Approval to Sweeping Tax Overhaul |work=The New York Times |url=https://www.nytimes.com/2017/12/20/us/politics/tax-bill-republicans.html}}</ref><ref>{{cite web |last1=Seipel |first1=Arnie |last2=Kurtzleben |first2=Danielle |date=December 20, 2017 |title=Congress Passes $1.5 Trillion Tax Cut Bill, a Legislative Win for Trump |url=https://www.npr.org/2017/12/20/572157392/gop-poised-for-tax-victory-after-a-brief-delay |access-date=December 20, 2017 |publisher=NPR}}</ref> President Donald Trump then signed the bill into law on December 22, 2017.<ref>{{Cite news |last=Wagner |first=John |date=December 22, 2017 |title=Trump signs sweeping tax bill into law |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/post-politics/wp/2017/12/22/trump-signs-sweeping-tax-bill-into-law/}}</ref>
===Differences between the House and Senate bills=== There were important differences between the House and Senate versions of the bills, due in part to the Senate reconciliation rules, which required that the bill impact the deficit by less than $1.5 trillion over ten years and have minimal deficit impact thereafter. (The Byrd Rule allows senators to block legislation if it would increase the deficit significantly beyond a ten-year period.<ref name="TPC_Nov8">{{cite web |date=November 8, 2017 |title=Preliminary Distributional Analysis of the 'Tax Cuts and Jobs Act' |url=http://www.taxpolicycenter.org/publications/preliminary-distributional-analysis-tax-cuts-and-jobs-act |access-date=July 9, 2018}}</ref><ref name="LevitzFilibuster">{{cite news |last=Levitz |first=Eric |date=November 10, 2017 |title=The GOP Tax Plan Is Dead – Unless the Filibuster Dies First |work=New York |url=https://nymag.com/daily/intelligencer/2017/11/the-gop-tax-plan-is-dead-unless-the-filibuster-dies-first.html}}</ref>) For example: * The House plan had four income tax brackets ranging from 12% to 39.6%, while the Senate bill kept seven brackets ranging from 10% to 38.5%.<ref name="sticking">{{cite news |last1=Horsley |first1=Scott |date=December 4, 2017 |title=9 Sticking Points The House And Senate Have To Work Out In Their Tax Bills |newspaper=NPR |url=https://www.npr.org/2017/12/04/568329807/9-sticking-points-the-house-and-senate-have-to-work-out-in-their-tax-bills |access-date=July 9, 2018}}</ref> * The House plan cut the corporate tax immediately, while the Senate plan delayed it until 2019. * The House plan made both individual and corporate taxes "permanent" (i.e., no set expiration) while the Senate bill had most of the individual tax cuts expiring (but not the business cuts). * The House plan did not repeal the health insurance individual mandate, while the Senate bill and final Act did. * The House plan eliminated deductions for state, local, and sales taxes paid, and capped property deductions at $10,000. The Senate bill initially would have eliminated the state and local property tax deduction, but in the later Act, this was later changed back to a $10,000 mirroring the House version. * The House plan allowed parents to put aside money for an unborn child's college education. The Senate bill did not include this provision. * The House plan capped the deduction for mortgage interest to the first $500,000 mortgage debt versus the current $1{{nbsp}}million, while the Senate did not change it.<ref>{{cite news |last=Rappeport |first=Alan |date=November 16, 2017 |title=The House and Senate Still Have Very Different Tax Bills. Here's How They Compare. |work=The New York Times |url=https://www.nytimes.com/2017/11/16/us/politics/the-house-and-senate-still-have-very-different-tax-bills.html}}</ref> * The House plan repealed the Johnson Amendment. Neither the Senate version<ref name="GiftRight">{{cite news |last1=Vogel |first1=Kenneth P. |last2=Goodstein |first2=Laurie |date=November 26, 2017 |title=In Tax Debate, Gift to Religious Right Could Be Bargaining Chip |work=The New York Times |url=https://www.nytimes.com/2017/11/26/us/politics/johnson-amendment-churches-taxes-politics.html}}</ref> nor the final Act included a repeal of the Johnson Amendment.<ref>Heather Long, [https://www.washingtonpost.com/news/wonk/wp/2017/12/14/in-small-win-for-democrats-the-final-tax-bill-wont-include-a-provision-to-allow-churches-to-endorse-political-candidates/ In a small win for Democrats, the final tax bill will not include a provision allowing churches to endorse political candidates], ''The Washington Post'' (December 14, 2017).</ref> * The House plan forbade the use of tax-exempt municipal bonds to fund professional sports stadiums. The Senate version and the final Act did not.<ref>Ted Gayer and Austin J. Drukker, [https://www.brookings.edu/blog/up-front/2017/12/04/a-small-difference-between-the-house-and-senate-tax-plans-could-mean-big-benefits-for-private-sports-stadiums/ A small difference between the House and Senate tax plans could mean big benefits for private sports stadiums], ''Brookings Up Front'' (December 4, 2017).</ref>
thumb|300x300px|President Trump and Vice President Pence celebrate the passage of the Tax Cuts Acts with Republican lawmakers at a press conference outside the White House.
In final changes prior to approval of the Senate bill on December 2, additional changes were made (among others) that were reconciled with the House bill in a conference committee, prior to providing a final bill to the President for signature.<ref>{{cite web |title=JCX-62-17 |url=https://www.jct.gov/publications.html?func=startdown&id=5046 |access-date=July 9, 2018 |website=www.jct.gov}}</ref> The Conference Committee version was published on December 15, 2017. It had relatively minor differences compared to the Senate bill. Individual and pass-through tax cuts expire after ten years, while the corporate tax changes are permanent.<ref name="Hill_Final1" />
=== Pre-conference vote === ==== House of Representatives ==== {| class="wikitable" style="width:50%;" |+ Tax Cuts and Jobs Act – Vote in the House of Representatives (November 16, 2017)<ref name="November 16 House vote">{{cite news |last1=Lai |first1=K.K. Rebecca |last2=Andrews |first2=Wilson |last3=Parlapiano |first3=Alicia |date=November 16, 2017 |title=How Every Member Voted on the House Tax Bill |work=The New York Times |url=https://www.nytimes.com/interactive/2017/11/16/us/politics/house-vote-republican-tax-bill.html |access-date=December 19, 2017}}</ref> |- ! colspan="2" | Party ! style="width:20%;" | Votes for ! style="width:20%;" | Votes against ! style="width:20%;" | Not voting/Absent |- | {{party name with colour|Republican Party (United States)}} (240) | style="background:#cfc;" | '''227''' | {{collapsible list |title=13 | 1 = Dan Donovan | 2 = John Faso | 3 = Rodney Frelinghuysen | 4 = Darrell Issa | 5 = Walter B. Jones Jr. | 6 = Peter T. King | 7 = Leonard Lance | 8 = Frank LoBiondo | 9 = Tom McClintock | 10 = Dana Rohrabacher | 11 = Chris Smith | 12 = Elise Stefanik | 13 = Lee Zeldin}} | – |- | {{party name with colour|Democratic Party (United States)}} (194) | – | style="background:#ffaeb9;" | '''192''' | {{collapsible list |title=2 | 1 = Mark Pocan | 2 = Frederica Wilson}} |- ! colspan="2" | Total (434)<ref group="nb">There was one vacant seat in the House of Representatives after Tim Murphy's resignation on October 21, 2017.</ref> ! 227 ! 205 ! 2 |}
==== Senate ==== {| class="wikitable" style="width:50%;" |+ Tax Cuts and Jobs Act – Vote in the Senate (December 2, 2017)<ref name="December 1 Senate vote">{{cite news |last1=Lee |first1=Jasmine C. |last2=Storey |first2=Rachel |last3=Simon |first3=Sara |date=December 1, 2017 |title=See How Every Senator Voted on the Republican Tax Bill |work=The New York Times |url=https://www.nytimes.com/interactive/2017/12/01/us/politics/senate-tax-bill-vote.html |access-date=December 19, 2017}}</ref> |- ! colspan="2" | Party ! style="width:20%;" | Votes for ! style="width:20%;" | Votes against ! style="width:20%;" | Not voting/Absent |- | {{party name with colour|Republican Party (United States)}} (52) | style="background:#cfc;" | '''51''' | {{collapsible list |title=1 | 1 = Bob Corker}} | – |- | {{party name with colour|Democratic Party (United States)}} (46) | – | style="background:#ffaeb9;" | '''46''' | – |- | {{party name with colour|Independent politician}} (2) | – | style="background:#ffaeb9;" | {{collapsible list |title=2 | 1 = Angus King | 2 = Bernie Sanders}} | – |- ! colspan="2" | Total (100) ! 51 ! 49 ! – |}
=== Post-conference vote ===
==== House of Representatives ==== {| class="wikitable" style="width:50%;" |+ Tax Cuts and Jobs Act – Vote in the House of Representatives (December 19, 2017)<ref name="December 19 House vote">{{cite news |last1=Almukhtar |first1=Sarah |last2=Carlsen |first2=Audrey |last3=Lai |first3=K.K. Rebecca |last4=Migliozzi |first4=Blacki |last5=Parlapiano |first5=Alicia |last6=Patel |first6=Jugal K. |last7=Shorey |first7=Rachel |date=December 19, 2017 |title=How Each House Member Voted on the Tax Bill |work=The New York Times |url=https://www.nytimes.com/interactive/2017/12/19/us/politics/tax-bill-house-live-vote.html |access-date=December 19, 2017}}</ref> |- ! colspan="2" | Party ! style="width:20%;" | Votes for ! style="width:20%;" | Votes against ! style="width:20%;" | Not voting/Absent |- | {{party name with colour|Republican Party (United States)}} (239) | style="background:#cfc;" | '''227''' | {{collapsible list |title=12 | 1 = Dan Donovan | 2 = John Faso | 3 = Rodney Frelinghuysen | 4 = Darrell Issa | 5 = Walter B. Jones Jr. | 6 = Peter T. King | 7 = Leonard Lance | 8 = Frank LoBiondo | 9 = Dana Rohrabacher | 10 = Chris Smith | 11 = Elise Stefanik | 12 = Lee Zeldin}} | – |- | {{party name with colour|Democratic Party (United States)}} (193) | – | style="background:#ffaeb9;" | '''191''' | {{collapsible list|title=2 | 1 = Joe Kennedy III | 2 = Mark Pocan}} |- ! colspan="2" | Total (432)<ref group="nb">There were three vacant seats in the House of Representatives after Tim Murphy's resignation on October 21, 2017; John Conyers' resignation on December 5, 2017; and Trent Franks' resignation on December 8, 2017.</ref> ! 227 ! 203 ! 2 |} {| class="wikitable" style="width:50%;" |+ Act to provide for reconciliation – Vote in the House of Representatives (December 20, 2017)<ref name="December 20 House vote">{{cite web |date=December 20, 2017 |title=Final Vote Results for Roll Call 699 |url=http://clerk.house.gov/evs/2017/roll699.xml |access-date=December 21, 2017 |publisher=Clerk of the United States House of Representatives}}</ref> |- ! colspan="2" | Party ! style="width:20%;" | Votes for ! style="width:20%;" | Votes against ! style="width:20%;" | Not voting/Absent |- | {{party name with colour|Republican Party (United States)}} (239) | style="background:#cfc;" | '''224''' | {{collapsible list |title=12 | 1 = Dan Donovan | 2 = John Faso | 3 = Rodney Frelinghuysen | 4 = Darrell Issa | 5 = Walter B. Jones Jr. | 6 = Peter T. King | 7 = Leonard Lance | 8 = Frank LoBiondo | 9 = Dana Rohrabacher | 10 = Chris Smith | 11 = Elise Stefanik | 12 = Lee Zeldin}} | {{collapsible list|title=3 | 1 = Mo Brooks | 2 = Jim Renacci | 3 = Lamar Smith}} |- | {{party name with colour|Democratic Party (United States)}} (193) | – | style="background:#ffaeb9;" | '''189''' | {{collapsible list|title=4 | 1 = Joe Kennedy III | 2 = Grace Napolitano | 3 = Mark Pocan | 4 = Bennie Thompson}} |- ! colspan="2" | Total (432) ! 224 ! 201 ! 7 |}
==== Senate ==== {| class="wikitable" style="width:50%;" |+ Act to provide for reconciliation – Vote in the Senate (December 20, 2017)<ref name="December 20 Senate vote">{{cite news |last1=Lee |first1=Jasmine C. |last2=Simon |first2=Sara |date=December 19, 2017 |title=How Every Senator Voted on the Tax Bill |work=The New York Times |url=https://www.nytimes.com/interactive/2017/12/19/us/politics/tax-bill-senate-live-vote.html |access-date=December 19, 2017}}</ref> |- ! colspan="2" | Party ! style="width:20%;" | Votes for ! style="width:20%;" | Votes against ! style="width:20%;" | Not voting/Absent |- | {{party name with colour|Republican Party (United States)}} (52) | style="background:#cfc;" | '''51''' | – | {{collapsible list |title=1 | 1 = John McCain}} |- | {{party name with colour|Democratic Party (United States)}} (46) | – | style="background:#ffaeb9;" |'''46''' | – |- | {{party name with colour|Independent politician}} (2) | – | style="background:#ffaeb9;" | {{collapsible list |title=2 | 1 = Angus King | 2 = Bernie Sanders}} | – |- ! colspan="2" | Total (100) ! 51 ! 48 ! 1 |}
== Impact == A 2024 study on the impact of the TCJA found that "the TCJA clearly raised federal debt and increased after-tax incomes, disproportionately increasing incomes for the most affluent. Its effects on GDP and median wages seem modest at best, although clear counterfactuals are difficult to identify. The impact on investment is less certain."<ref name=":1" /> Another 2024 study, which analyzed the corporate tax cut in the TCJA (which was the largest such cut in US history), found that the tax cut reduced corporate tax revenue by 40 percent and increased corporate investment by 11 percent. The study also found that the corporate tax cut "increased economic growth and wages by less than advertised by the Act's proponents."<ref name=":12" />
A 2025 study found that the 20% deduction for pass-through business income resulted in a 3-4% increase in business incomes. However, aside from that, there was "little evidence of changes in real economic activity as measured by physical investment, wages to non-owners, or employment."<ref>{{Cite journal |last1=Goodman |first1=Lucas |last2=Lim |first2=Katherine |last3=Sacerdote |first3=Bruce |last4=Whitten |first4=Andrew |date=2025 |title=How do business owners respond to a tax cut? Examining the 199A deduction for pass-through firms |url=https://www.sciencedirect.com/science/article/abs/pii/S0047272724002299 |journal=Journal of Public Economics |volume=242 |article-number=105293 |doi=10.1016/j.jpubeco.2024.105293 |issn=0047-2727}}</ref>
=== Estimated impact === ==== Taxpayer ==== According to a 2017 report by the nonpartisan Tax Policy Center, the TCJA was expected to lower taxes by an average of $1,600 in 2018 and 2025. The top 20% of Americans by income were projected to receive roughly 65% of the tax savings.<ref>{{Cite web |title=Distributional Analysis of the Conference Agreement for the Tax Cuts and Jobs Act |url=https://www.taxpolicycenter.org/publications/distributional-analysis-conference-agreement-tax-cuts-and-jobs-act/full |access-date=2022-08-09 |website=Tax Policy Center |date=December 18, 2017 |language=en}}</ref> The TPC estimated that the bottom 80% of taxpayers (income under $149,400) would receive 35% of the benefit in 2018, 34% in 2025 and none of the benefit in 2027, with some groups incurring costs.<ref name="TPC_CC1"/> TPC also estimated 72% of taxpayers would be adversely impacted in 2019 and beyond, if the tax cuts are paid for by spending cuts separate from the legislation, as most spending cuts would impact lower- to middle-income taxpayers and outweigh the benefits from the tax cuts.<ref name="Vox_PaidFor">{{cite web |last=Matthews |first=Dylan |date=December 8, 2017 |title=The Republican tax plan leaves a $1.5 trillion bill for the middle class to pay |url=https://www.vox.com/policy-and-politics/2017/12/8/16751032/senate-house-republican-tax-plan-deficit-spending-cuts |access-date=July 9, 2018 |publisher=Vox}}</ref>
==== Economic ==== thumb|450px|right|Tax Policy Center estimate of the annual changes in GDP and budget deficit over the 2018–2027 period under the Senate version of the bill. The cumulative GDP increase of $961{{nbsp}}billion is less than the deficit increase of $1,233{{nbsp}}billion, including macroeconomic feedback effects.<ref name=TPC_Senate_Macro/> [[File:U.S. Federal Revenue Collection Forecasts 2018-2025.png|thumb|450px|right|Comparison of U.S. federal revenues for two CBO forecasts, one from January 2017 (based on laws at the end of the Obama Administration) and the other from April 2018, which reflects Trump's policy changes. Key insights include: 1) Tax cuts reduce revenue collections relative to a baseline without them; 2) Tax revenues rise each year under both forecasts as the economy grows; and 3) The gap is larger initially, indicating larger stimulus effects in the earlier years.<ref name="CBO_BEO17">{{cite web |date=January 24, 2017 |title=The Budget and Economic Outlook: 2017 to 2027 |url=https://www.cbo.gov/publication/52370 |access-date=July 9, 2018 |publisher=Congressional Budget Office}}</ref><ref name="CBO_April2018Update">{{Cite web |title=CBO-Appendix B: The Effects of the 2017 Tax Act on CBO's Economic and Budget Projections, page 129 |url=https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53651-outlook.pdf#page=133}}</ref>]] The tax cuts contained in the Tax Cuts and Jobs Act were expected to increase deficits thereby stimulating the economy, increasing GDP and employment, relative to a forecast without those tax cuts. CBO reported on December 21, 2017: "Overall, the combined effect of the change in net federal revenue and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units".<ref name="CBO_DistFinal">{{cite web|url=https://www.cbo.gov/publication/53429|title=Distributional Effects of Changes in Taxes and Spending Under the Conference Agreement for H.R. 1 – Congressional Budget Office|website=www.cbo.gov|date=December 21, 2017|access-date=July 9, 2018}}</ref>
The Tax Policy Center (TPC) reported its macroeconomic analysis of the November 16 Senate version of the Act on December 1, 2017: *Gross domestic product would be 0.4% higher on average each year during the 2018–2027 period relative to the CBO baseline forecast, a cumulative total of $961{{nbsp}}billion higher over ten years. TPC explained that since most tax reductions would benefit high-income households (who spend a smaller share of tax reductions than lower-income households) the effect on GDP would be modest. Further, TPC reported that: "Because the economy is currently near full employment, the impact of increased demand on output would be smaller and diminish more quickly than it would if the economy were in recession."<ref name=TPC_Senate_Macro>{{cite web|url=http://www.taxpolicycenter.org/publications/macroeconomic-analysis-tax-cuts-and-jobs-act-passed-senate-finance-committee|title=Macroeconomic Analysis of the Tax Cuts and Jobs Act as Passed by the Senate Finance Committee|date=December 1, 2017|access-date=July 9, 2018}}</ref>
The Penn Wharton Budget Model (PWBM) estimated relative to a prior law baseline that by 2027: *The GDP level would be between 0.6% and 1.1% higher. *Debt would increase by between $1.9 trillion and $2.2 trillion, including macroeconomic feedback effects.<ref>{{cite web|url=http://budgetmodel.wharton.upenn.edu/issues/2017/12/18/the-tax-cuts-and-jobs-act-reported-by-conference-committee-121517-preliminary-static-and-dynamic-effects-on-the-budget-and-the-economy|title=The Tax Cuts and Jobs Act, as Reported by Conference Committee (12/15/17): Static and Dynamic Effects on the Budget and the Economy|date=December 18, 2017 |access-date=July 9, 2018}}</ref> Analysis of first-year results released by the Congressional Research Service in May 2019 includes:<ref>{{Cite news |title=Analysis | A new report further undermines Trump's claim that the tax cuts were economic 'rocket fuel' |newspaper=The Washington Post |url=https://www.washingtonpost.com/politics/2019/05/28/new-report-further-undermines-trumps-claim-that-tax-cuts-were-economic-rocket-fuel/}}</ref><ref>The Economic Effects of the 2017 Tax Revision: Preliminary Observations, Congressional Research Service, May 22, 2019: https://sgp.fas.org/crs/misc/R45736.pdf</ref> * "a relatively small (if any) first-year effect on the economy" * "a feedback effect of 0.3% of GDP or less," * "pretax profits and economic depreciation (the price of capital) grew faster than wages" * inflation-adjusted wage growth "is smaller than overall growth in labor compensation and indicates that ordinary workers had very little growth in wage rates" * "the evidence does not suggest a surge in investment from abroad in 2018" * "While evidence does indicate significant repurchases of shares, either from tax cuts or repatriated revenues, relatively little was directed to paying worker bonuses"
==== Budgetary ==== thumb|right|450px|CBO forecasts that the 2017 Tax Act will increase the budget deficit by $2.289 trillion over the 2018–2027 decade, or $1.891 trillion after macro-economic feedback.<ref name="CBO_April2018Update"/>
CBO forecast in January 2017 (just prior to Trump's inauguration) that revenues in fiscal year 2018 would be $3.60 trillion if laws in place as of January 2017 continued.<ref name=CBO>{{cite web|url=https://www.cbo.gov/about/products/budget-economic-data#3|title=Budget and Economic Data – Congressional Budget Office|website=www.cbo.gov}}</ref>
CBO reported on December 21, 2017, that: "Overall, the combined effect of the change in net federal revenue and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units."<ref name="CBO_DistFinal"/>
The Joint Committee on Taxation estimated the Act would add $1.456{{nbsp}}trillion total to the annual deficits (debt) over ten years.<ref name=JCT_BudgetConf>{{cite web|url=https://www.jct.gov/publications.html?func=startdown&id=5053|title=JCX-67-17|website=www.jct.gov|access-date=July 9, 2018}}</ref>
==== Distribution ==== thumb|right|450px|Average tax rate changes for various income groups, by year, under the Conference Agreement, as of December 15, 2017. The slope of each line down to the right indicates larger benefits for higher incomes, while the upward shift of the lines over time indicates fading benefits (or increasing costs) across all income levels.<ref name="JCT_ConfCmte">{{cite web|url=https://www.jct.gov/publications.html?func=startdown&id=5054|title=JCX-68-17|website=www.jct.gov|access-date=July 9, 2018}}</ref> thumb|right|450px|CBO and JCT estimate of the distribution of impact by income group (average dollars per taxpayer) under the Act. On average, taxpayers in the income groups highlighted in yellow will incur a net cost (shown as a positive figure as this reduces the budget deficit), due in part to reduced healthcare subsidies. Higher income taxpayers receive a benefit via tax cuts (shown as a negative number as this increases the budget deficit). The percent of taxpayers in each income group is also shown for the 2023 period. The term "taxpayer" in the chart refers to the more formal "tax filing unit" in the CBO and JCT studies. A tax filing unit is a tax return, meaning it could represent one person or a married couple filing jointly, among other options.<ref name="CBO_DistFinal"/><ref name="JCT_DistNum">{{cite web|url=https://www.jct.gov/publications.html?func=startdown&id=5040|title=JCX-58-17|website=www.jct.gov|access-date=July 9, 2018}}</ref> thumb|right|450px|Distribution of benefits during 2018 by income percentile under the Tax Cuts and Jobs Act (Conf. Cmte. version) based on data from the Tax Policy Center. The top 10% of taxpayers (incomes over $216,800) receive 52% of the benefit, while the bottom 60% (incomes under $86,100) receive 17% of the benefit. This excludes the impact of reduced ACA subsidies.<ref name="TPC_CC1"/>
{{See also|Tax policy and economic inequality in the United States}}
On December 21, 2017, the Congressional Budget Office (CBO) released its distribution estimate of the Act:
* During 2019, income groups earning under $20,000 (about 23% of taxpayers) would contribute to deficit reduction (i.e., incur a cost), mainly by receiving fewer subsidies due to the zeroing out of the individual mandate of the Affordable Care Act. Other groups would contribute to deficit increases (i.e., receive a benefit), mainly due to tax cuts. * During 2021, 2023, and 2025, income groups earning under $40,000 (about 43% of taxpayers) would contribute to deficit reduction, while income groups above $40,000 would contribute to deficit increases. * During 2027, income groups earning under $75,000 (about 76% of taxpayers) would contribute to deficit reduction, while income groups above $75,000 would contribute to deficit increases.<ref name="CBO_DistFinal"/><ref name="JCT_DistNum"/>
The Tax Policy Center (TPC) reported its distributional estimates for the Act. This analysis excludes the impact of zeroing out the ACA individual mandate, which would apply significant costs primarily to income groups below $40,000. It also assumes the Act is deficit financed and thus excludes the impact of any spending cuts used to finance the Act, which also would fall disproportionally on lower income families as a percentage of their income.<ref name="TPC_CC1">{{cite web|url=http://www.taxpolicycenter.org/publications/distributional-analysis-conference-agreement-tax-cuts-and-jobs-act|title=Distributional Analysis of the Conference Agreement for the Tax Cuts and Jobs Act|date=December 18, 2017|access-date=July 9, 2018}}</ref>
==== Healthcare ==== thumb|right|400px|U.S. uninsured number (millions) and rate (%), including historical data through 2016 and two CBO forecasts (2016/Obama policy and 2018/Trump policy) through 2026. Two key reasons for more uninsured under President Trump include: 1) Eliminating the individual mandate to have health insurance (part of the Tax Act); and 2) Stopping cost sharing reduction payments.<ref name="CBO_Subsidy2018">{{cite web|url=https://www.cbo.gov/publication/53826|title=Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018 to 2028 – Congressional Budget Office|website=www.cbo.gov|date=May 23, 2018|access-date=July 9, 2018}}</ref> The TCJA affected healthcare by setting at $0 the ACA individual mandate, resulting in projections of up to 13{{nbsp}}million fewer persons covered by health insurance as some younger, healthier persons will likely choose not to obtain coverage.<ref name="Vox-Health"/><ref name="CBO_Mandate">{{cite web|url=https://www.cbo.gov/publication/53300|title=Repealing the Individual Health Insurance Mandate: An Updated Estimate – Congressional Budget Office|website=www.cbo.gov|date=November 8, 2017|access-date=July 9, 2018}}</ref> The CBO later revised this estimate in 2018 to 7{{nbsp}}million fewer insured by 2026.<ref name="CBO_Subsidy2018"/>
=== Actual impact === According to Bloomberg, the TCJA has simplified the tax code for some, but not others; has lowered corporate debt; has led investment to temporarily increase before declining; and has brought money back from overseas without bringing back business activity.<ref name=":11" /> The TCJA also cut taxes for most U.S. taxpayers.<ref name="face" /><ref name="false" /> In 2018, more than 90 ''Fortune'' 500 companies had "paid an effective federal tax rate of 0% or less" as a result of Donald Trump's Tax Cuts and Jobs Act of 2017.<ref name="cnbc">{{Cite news |last=Pound |first=Jesse |date=December 16, 2019 |title=These 91 companies paid no federal taxes in 2018 |url=https://www.cnbc.com/2019/12/16/these-91-fortune-500-companies-didnt-pay-federal-taxes-in-2018.html |access-date=2025-03-01 |work=CNBC}}</ref>
==== Taxpayer ==== In the spring of 2019, both ''The New York Times''<ref name="face">{{cite news|url=https://www.nytimes.com/2019/04/14/business/economy/income-tax-cut.html|title=Face It: You (Probably) Got a Tax Cut|work=The New York Times |date=April 14, 2019}}</ref> and the ''Washington Post''<ref name="false">{{cite news|url=https://www.washingtonpost.com/politics/2019/05/01/bidens-false-claim-that-no-one-rich-got-trumps-tax-cuts/|title=Biden's false claim that no one but the rich got Trump's tax cuts |newspaper=Washington Post|last=Kessler|first=Glenn|date=May 1, 2019}}</ref> stated that most American taxpayers had received tax cuts under the TCJA.
The Tax Policy Center stated in 2019 that the TCJA had lowered individual income taxes for approximately 65% of U.S. households, had raised individual income taxes for approximately 6% of American households, and had left taxes about the same for the remainder of U.S. households.<ref>{{Cite web|url=https://www.taxpolicycenter.org/taxvox/three-numbers-know-about-tcja-2018|title=The Three Numbers To Know About The TCJA In 2018|date=April 18, 2019|website=Tax Policy Center|last=Gleckman|first=Howard}}</ref>
In October 2017, the Council of Economic Advisers estimated that the corporate tax cut contained within the TCJA would increase real median household income by $3,000 to $7,000 annually.<ref>{{Cite web|url=https://trumpwhitehouse.archives.gov/sites/whitehouse.gov/files/documents/Tax%20Reform%20and%20Wages.pdf|title=White House}}</ref> However, during the first year following enactment of the TCJA, real median household income increased by $553; the Census Bureau characterized this increase as statistically insignificant.<ref>{{cite web |last=Jones |first=Paul Davidson and Charisse |title=More Americans go without health insurance for the first time in a decade |url=https://www.usatoday.com/story/money/2019/09/10/median-household-income-stagnant-last-year-poverty-fell/2271025001/ |website=USA TODAY}}</ref>
==== Economic ==== In 2018, companies spent a record-setting $1.1 trillion to buy back their own stock, and a majority of major firms (84%, as polled by the National Association for Business Economics) did not alter their hiring practice or their investment in their business in response to the tax cuts they received. This pattern was evident even in early 2018, when Bloomberg reported (based on an analysis of 51 S&P 500 companies) that an estimated 60% of corporate tax savings was going to shareholders, while 15% was going to employees.<ref name="bloomberg.com">{{cite news|url=https://www.bloomberg.com/gadfly/articles/2018-03-05/five-charts-that-show-where-those-corporate-tax-savings-are-going|title=Five Charts That Show How Companies Are Spending Their Tax Savings|website=Bloomberg News|date=March 5, 2018 |access-date=July 9, 2018}}</ref> A Bloomberg Economics analysis found that, while business investment did increase in 2018, relatively little of that activity could be attributed to lower taxes.<ref>{{cite web|title=Trump's Big Tax Cuts Did Little to Boost Economic Growth|url=https://www.bloomberg.com/news/articles/2019-03-06/trump-s-big-tax-cuts-did-little-to-boost-economic-growth|last=Mahedy|first=Tim|date=6 March 2019|website=www.bloomberg.com|access-date=2020-05-05}}</ref> A study by the Federal Reserve Bank similarly found that corporations bought-back stock and paid down debt, rather than undertake either new capital expenditure or investment in research & development.<ref>{{Cite journal|url=https://www.federalreserve.gov/econres/notes/feds-notes/us-corporations-repatriation-of-offshore-profits-20190806.html|title=U.S. Corporations' Repatriation of Offshore Profits: Evidence from 2018|first1=Michael|last1=Smolyansky|first2=Gustavo|last2=Suarez|first3=Alexandra|last3=Tabova|date=August 6, 2019|via=www.federalreserve.gov}}</ref>
''Bloomberg News'' reported in January 2020 that the top six American banks saved more than $32 billion in taxes during the two years after enactment of the tax cut, while they reduced lending, cut jobs and increased distributions to shareholders.<ref>{{cite web |url=https://www.bloomberg.com/news/articles/2020-01-16/trump-tax-cut-hands-32-billion-windfall-to-america-s-top-banks |title=Trump Tax Cut Hands $32 Billion Windfall to America's Top Banks |first=Yalman |last=Onaran |date=January 16, 2020 |publisher=Bloomberg |access-date=2022-04-05}}</ref>
A 2024 study by Patrick J. Kennedy and the Joint Committee on Taxation found that in response to the corporate tax provisions of the TCJA, the top 10 percent of income earners experienced wage increases while the bottom 90 percent did not.<ref>{{Cite web |title=The Efficiency-Equity Tradeoff of the Corporate Income Tax: Evidence from the Tax Cuts and Jobs Act |url=https://oxfordtax.sbs.ox.ac.uk/article/efficiency-equity-tradeoff-corporate-income-tax-evidence-tax-cuts-and-jobs-act |access-date=2025-02-27 |website=oxfordtax.sbs.ox.ac.uk |language=en}}</ref>
==== Budgetary ==== In the two years since the Act was passed, it failed to pay for itself through increased economic growth as initially claimed, according to Maya MacGuineas, president of the Committee for a Responsible Federal Budget.<ref>{{cite news|last1=Horsley |first1=Scott|title=After 2 Years, Trump Tax Cuts Have Failed To Deliver On GOP's Promises |url=https://www.npr.org/2019/12/20/789540931/2-years-later-trump-tax-cuts-have-failed-to-deliver-on-gops-promises|work=NPR |date=December 20, 2019}}</ref>
Federal corporate tax receipts fell from an annualized level of $409{{nbsp}}billion in Q1 2017 to $269{{nbsp}}billion in Q1 2018, a direct result of the Trump tax cuts.<ref>{{cite web |title=Federal government current tax receipts: Taxes on corporate income |url=https://fred.stlouisfed.org/graph/?graph_id=481697 |publisher=Federal Reserve Bank of St. Louis |date=June 28, 2018 |access-date=July 1, 2018}}</ref><ref>{{cite news|url=https://www.nytimes.com/2018/06/30/opinion/trumps-potemkin-economy.html|title=Opinion – Trump's Potemkin Economy|newspaper=The New York Times|date=June 30, 2018|access-date=July 1, 2018|last1=Krugman|first1=Paul}}</ref> Corporate tax receipts for the full fiscal year ended September 2018 were down 31% from the prior fiscal year, the largest decline since records began in 1934, except for during the Great Recession when corporate profits, and hence corporate tax receipts, plummeted. Analysts attributed the fiscal 2018 decline to the tax cut.<ref>{{Cite news |title=Analysis: With corporate tax receipts sagging, the federal deficit hits a monthly high |newspaper=The Washington Post |url=https://www.washingtonpost.com/politics/2019/03/22/with-corporate-tax-receipts-sagging-federal-deficit-hits-monthly-high/}}</ref><ref>{{cite web |title=Corporate Tax Receipts Took an Unprecedented Drop This Year |url=https://www.pgpf.org/blog/2018/10/corporate-tax-receipts-were-down-by-nearly-one-third-in-fiscal-year-2018 |website=www.pgpf.org}}</ref><ref>{{cite web |title=Corporate Profits 🠉, Corporate Federal Tax Collections 🠋 |url=https://itep.org/corporate-profits-up-corporate-federal-tax-collections-down/ |website=ITEP}}</ref><ref>{{cite news |last=Davidson |first=Kate |date=February 14, 2019 |title=U.S. Tax Revenues Fall, Deficit Widens in Wake of New Tax Law |newspaper=Wall Street Journal |url=https://www.wsj.com/articles/u-s-tax-revenue-declined-0-4-in-2018-11550084426 |via=www.wsj.com}}</ref>
''The New York Times'' reported in August 2019 that: "The increasing levels of red ink stem from a steep falloff in federal revenue after Mr. Trump’s 2017 tax cuts, which lowered individual and corporate tax rates, resulting in far fewer tax dollars flowing to the Treasury Department. Tax revenues for 2018 and 2019 have fallen more than $430 billion short of what the budget office predicted they would be in June 2017, before the tax law was approved that December."<ref>{{cite news|url=https://www.nytimes.com/2019/08/21/us/politics/deficit-will-reach-1-trillion-next-year-budget-office-predicts.html|title=Deficit Will Reach $1 Trillion Next Year, Budget Office Predicts|first1=Jim|last1=Tankersley|first2=Emily|last2=Cochrane|newspaper=The New York Times|date=21 August 2019}}</ref>
==== Distribution ==== An Institute on Taxation and Economic Policy analysis indicated the Act has more of a tax increase impact on "upper-middle-class families in major metropolitan areas, particularly in Democratic-leaning states where taxes, and usually property values, are higher. While only about one-in-five families between the 80th and 95th income percentiles in most red states would face higher taxes by 2027 under the House GOP bill, that number rises to about one-third in Colorado and Illinois, around two-fifths or more in Oregon, Virginia, Massachusetts, New York and Connecticut, and half or more in New Jersey, California and Maryland..."<ref>{{cite news|url=http://www.cnn.com/2017/11/14/politics/gop-tax-plans-could-fuel-the-suburban-revolt-against-trump/index.html|title=GOP tax plans could fuel the suburban revolt against Trump|first=Ronald |last=Brownstein|date=November 14, 2017|publisher=CNN|access-date=July 9, 2018}}</ref>
==Reception== {{POV section|date=September 2022|talk=Reception (NPOV)}}
===Support=== Leading Republicans supported the bill, including President Donald Trump and Vice President Mike Pence, and Republicans in Congress, such as:<ref>{{cite news |title=Republicans roll out their long-awaited tax reform plan |work=cleveland.com |url=http://www.cleveland.com/metro/index.ssf/2017/11/republicans_finally_unveil_the.html |access-date=2017-11-03}}</ref> * Paul Ryan, Speaker of the United States House of Representatives (R-WI) * Mitch McConnell, Majority Leader of the United States Senate (R-KY) * Kevin McCarthy, House Majority Leader (R-CA)<ref>{{cite news |date=November 5, 2017 |title=Kevin McCarthy guarantees middle class tax cut under House GOP plan |work=Washington Examiner |url=http://www.washingtonexaminer.com/kevin-mccarthy-guarantees-middle-class-tax-cut-under-house-gop-plan/article/2639691}}</ref>
In the Senate, Republicans "eager for a major legislative achievement after the Affordable Care Act debacle ... have generally been enthusiastic about the tax overhaul."<ref name="RappeportFirst">{{cite news |last1=Rappeport |first1=Alan |last2=Kaplan |first2=Thomas |date=November 15, 2017 |title=Tax Bill Thrown Into Uncertainty as First G.O.P. Senator Comes Out Against It |work=The New York Times |url=https://www.nytimes.com/2017/11/15/us/politics/senate-house-tax-cut.html}}</ref>
A number of Republican senators who initially expressed trepidation over the bill, including Ron Johnson of Wisconsin, Susan Collins of Maine, and Steve Daines of Montana, ultimately voted for the Senate bill.<ref>{{cite news |last=Shepherd |first=Michael |date=December 2, 2017 |title=Susan Collins says she supports Senate GOP's tax bill |work=Bangor Daily News |url=https://bangordailynews.com/2017/12/01/politics/susan-collins-says-three-of-her-amendments-are-in-senate-gops-tax-bill/}}</ref><ref>Jacob Pramuk, [https://www.cnbc.com/2017/12/01/sen-steve-daines-one-of-the-last-gop-holdouts-will-back-senate-tax-bill-after-pass-through-tweak.html/ Ron Johnson and Steve Daines, two of the last Senate GOP holdouts, will back tax bill after pass-through tweak], CNBC (December 1, 2017).</ref>
The Trump Administration's Council of Economic Advisors supported the bill, claiming it would have significant economic benefits.<ref name=":2">{{cite web |title=CEA Report: The Growth Effects of Corporate Tax Reform and Implications for Wages |url=https://trumpwhitehouse.archives.gov/briefings-statements/cea-report-growth-effects-corporate-tax-reform-implications-wages/ |access-date=2019-06-04 |publisher=whitehouse.gov |via=National Archives}}</ref><ref name=":9">{{cite web |title=CEA Report-The Growth Effects of Corporate Tax Reform and Implications for Wages-October 27, 2017 |url=https://www.whitehouse.gov/the-press-office/2017/10/27/cea-report-growth-effects-corporate-tax-reform-and-implications-wages |url-status=dead |archive-url=https://web.archive.org/web/20171210111820/https://www.whitehouse.gov/the-press-office/2017/10/27/cea-report-growth-effects-corporate-tax-reform-and-implications-wages |archive-date=December 10, 2017}}</ref> President Trump and Treasury Secretary Steve Mnuchin claimed that the law's tax cuts would pay for themselves.<ref name=":10">{{cite web |last=Kruzel |first=John |date=April 28, 2017 |title=No evidence Trump's tax cut could pay for itself |url=http://www.politifact.com/punditfact/statements/2017/apr/28/rana-foroohar/trumps-tax-plan-prompts-question-can-tax-cuts-real/ |access-date=July 9, 2018 |website=PolitiFact}}</ref> Many Republican supporters of the tax bill characterized it as a simplification of the tax code.<ref name="VinikSimplify">{{cite news |last=Vinik |first=Danny |date=November 2, 2017 |title=Simpler taxes under the GOP plan? Don't count on it. |publisher=Politico |url=https://www.politico.com/agenda/story/2017/11/02/trump-republican-tax-plan-not-simple-000569/}}</ref><ref name=":11">{{Cite web |last=O'Neal |first=Lydia |date=2021-01-26 |title=The Trump Tax Cuts: Promises Made, Promises Kept? |url=https://news.bloombergtax.com/daily-tax-report/the-trump-tax-cuts-promises-made-promises-kept-1 |access-date=2022-09-20 |website=news.bloombergtax.com |language=en}}</ref>
=== Opposition === [[File:Tammy Duckworth speaking against the Tax Cuts and Jobs Act of 2017.jpg|thumb|Senator Tammy Duckworth and then-House Minority Leader Nancy Pelosi at a press conference opposing the bill in 2017]]
Democrats opposed the legislation, viewing it as a giveaway to corporations and high earners at the expense of middle class communities.<ref>{{cite news |last=Tankersley |first=Jim |date=October 29, 2017 |title=Democrats Attack Tax Bill as a 'Middle-Class Con Job' |work=The New York Times |url=https://www.nytimes.com/2017/10/29/us/politics/democrats-tax-reform-middle-class.html}}</ref> Every House Democrat voted against the bill when it came to the House floor, and 13 Republicans joined them in doing so.<ref name="NYTimesHouse" />
The top congressional Democrats—Senate Minority Leader Chuck Schumer of New York and House Minority Leader Nancy Pelosi—strongly oppose the bill. Schumer said of the bill that "The more it's in sunlight, the more it stinks."<ref>{{cite news |last1=DeBonis |first1=Mike |last2=Paletta |first2=Damian |date=2017-11-02 |title=Public will turn against GOP tax bill, Schumer predicts: 'The more it's in sunlight, the more it stinks' |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/powerpost/wp/2017/11/02/public-will-turn-against-gop-tax-bill-schumer-predicts-the-more-its-in-sunlight-the-more-it-stinks/ |access-date=2017-11-03 |issn=0190-8286}}</ref> Pelosi said the legislation was "designed to plunder the middle class to put into the pockets of the wealthiest 1 percent more money".<ref>{{cite news |date=November 2, 2017 |title=Transcript |work=At This Hour |publisher=CNN |url=http://transcripts.cnn.com/TRANSCRIPTS/1711/02/ath.01.html}}</ref>
The 13 House Republicans who voted against the bill were mostly from New York, New Jersey, and California, and several were opposed to the $10,000 cap on the state and local income tax deduction.<ref>Sam Petulla, Sean O'Key and Hannah Lang, [http://www.cnn.com/2017/11/16/politics/house-republicans-vote-no-tax-bill/index.html The House Republicans who voted 'no' on tax reform], CNN (November 16, 2017).</ref>
Billionaire and former Mayor of New York Michael Bloomberg called this tax bill an "economically indefensible blunder", arguing that companies would not invest more because of the tax cuts.<ref>{{cite news |title=Billionaire Michael Bloomberg: 'The Tax Bill Is an Economically Indefensible Blunder' |website=Money |url=https://money.com/billionaire-michael-bloomberg-the-tax-bill-is-an-economically-indefensible-blunder/ |url-status=live |access-date=2018-04-02 |archive-url=https://web.archive.org/web/20200809142632/https://money.com/billionaire-michael-bloomberg-the-tax-bill-is-an-economically-indefensible-blunder/ |archive-date=August 9, 2020}}</ref>
Bill Gates and Warren Buffett also thought that Trump's tax cut would not help businesses.<ref>{{cite web |title=Warren Buffett and Bill Gates don't think Trump's tax cut will help business |author-first1=Bob|author-last1=Bryan|date=8 May 2017|url=https://www.businessinsider.com/warren-buffett-bill-gates-say-trump-tax-cut-plan-wont-help-business-2017-5 |access-date=2018-04-02 |website=Business Insider}}</ref> In a CNBC interview, Buffett said: "I don't need a tax cut in a society with so much inequality".<ref>{{Cite news |last=Clifford |first=Catherine |date=2017-10-04 |title=Billionaire Warren Buffett: 'I don't need a tax cut' |work=CNBC |url=https://www.cnbc.com/2017/10/04/billionaire-warren-buffett-i-dont-need-a-tax-cut.html |access-date=2018-04-02}}</ref>
In a letter made public on the November 12, 2017, more than 400{{nbsp}}millionaires and billionaires (which include George Soros and Steven Rockefeller) asked Congress to reject the Republican tax plan. They stated that it would disproportionately benefit the wealthy while adding at least $1.5 trillion to the national debt.<ref>{{Cite news |title=Read the Letter |work=Responsible Wealth Project |url=http://www.responsiblewealth.org/read_the_letter |access-date=2018-04-02}}</ref><ref>{{Cite news |date=2017-11-13 |title=More than 400 millionaires and billionaires have called on Republicans not to cut their taxes |work=The Independent |url=https://www.independent.co.uk/news/world/americas/us-politics/republican-tax-plan-rich-tell-congress-dont-tax-us-soros-letter-trump-reform-a8053281.html |url-status=live |url-access=subscription |access-date=2018-04-02 |archive-url=https://ghostarchive.org/archive/20220526/https://www.independent.co.uk/news/world/americas/us-politics/republican-tax-plan-rich-tell-congress-dont-tax-us-soros-letter-trump-reform-a8053281.html |archive-date=May 26, 2022}}</ref><ref>{{Cite news |last=Long |first=Heather |date=2017-11-12 |title=More than 400 millionaires tell Congress: Don't cut our taxes |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/wonk/wp/2017/11/12/more-than-400-millionaires-tell-congress-dont-cut-our-taxes/ |access-date=2018-04-02 |issn=0190-8286}}</ref>
''The Economist'' was also critical of the tax cut: "The expiry of tax cuts for individuals is a ticking time-bomb in the tax code. It will explode just as America approaches a budget crisis, driven by rising spending on health care and pensions for the elderly. This gap will probably eventually be plugged by a combination of tax rises and spending cuts. But by cutting taxes now, Republicans have moved the starting point for any future negotiations".<ref>{{Cite news |date=2017-12-20 |title=Tax reform has passed. What now? |newspaper=The Economist |url=https://www.economist.com/democracy-in-america/2017/12/20/tax-reform-has-passed-what-now |access-date=2019-01-23 |issn=0013-0613}}</ref>
''The Financial Times'' argued that this bill was "built for plutocrats" as it would mainly benefit very high income households ("45 per cent of the tax reductions in 2027 would go to households with incomes above $500,000 – fewer than 1 per cent of filers").<ref>{{Cite news |last=Wolf |first=Martin |date=November 21, 2017 |title=A Republican tax plan built for plutocrats |work=Financial Times |url=https://www.ft.com/content/e494f47e-ce1a-11e7-9dbb-291a884dd8c6}}</ref>
The editorial board of ''The New York Times'' vigorously opposed the bill: "This bill is bad enough. No less revolting is the dishonest and sneaky way it was written."<ref>{{Cite news |author=The Editorial Board |date=2017-12-18 |title=Opinion {{!}} Tax Bill Lets Trump and Republicans Feather Their Own Nests |work=The New York Times |url=https://www.nytimes.com/2017/12/18/opinion/tax-bill-trump-republicans.html |access-date=2019-01-23 |issn=0362-4331}}</ref>
Editorial Boards of major US newspapers including ''USA Today'',<ref>{{cite web |title=Tax cuts the GOP will regret |url=https://www.usatoday.com/story/opinion/2017/12/10/tax-cuts-gop-regret-editorials-debates/920808001/ |access-date=2019-01-23 |website=USA TODAY}}</ref> ''The Washington Post'',<ref>{{Cite news |last=The Editorial Board |date=December 20, 2017 |title=Opinion {{!}} A win for the wealthy, the entitled and the irresponsible |newspaper=The Washington Post |url=https://www.washingtonpost.com/opinions/a-win-for-the-wealthy-the-entitled-and-the-irresponsible/2017/12/20/d9e617cc-e1c7-11e7-bbd0-9dfb2e37492a_story.html |access-date=2019-01-23}}</ref> the ''Los Angeles Times'',<ref>{{cite web |last=Board |first=The Times Editorial |date=December 2, 2017 |title=Editorial Board: The GOP's big tax win is a loss for the rest of us |url=https://www.latimes.com/opinion/editorials/la-ed-gop-tax-plan-20171202-story.html |access-date=2019-01-23 |website=Los Angeles Times}}</ref> the ''San Francisco Chronicle''<ref>{{cite web |date=2017-12-15 |title=Editorial: Headed for a cliff, GOP steps on the gas on tax cuts - SFChronicle.com |url=https://www.sfchronicle.com/opinion/editorials/article/Editorial-Headed-for-a-cliff-GOP-steps-on-the-12434768.php |access-date=2019-01-23 |website=www.sfchronicle.com}}</ref> and ''The Boston Globe''<ref>{{Cite news |title=One last chance for Collins to reject bad GOP tax bill |website=The Boston Globe |url=https://www.bostonglobe.com/opinion/editorials/2017/12/14/one-last-chance-for-collins-reject-bad-gop-tax-bill/BnuEACWJtG44qTFDG5rfRO/story.html |access-date=2019-01-23}}</ref> also opposed the bill.
==== Minor impact on economic growth ==== Paul Krugman disputed the Administration's primary argument that tax cuts for businesses will stimulate investment and higher wages:<ref name="Krugman_Everybody">{{cite news |last=Krugman |first=Paul |author-link=Paul Krugman |date=November 16, 2017 |title=Opinion: Everybody Hates the Trump Tax Plan |url=https://www.nytimes.com/2017/11/16/opinion/trump-tax-plan-hate.html |work=The New York Times}}</ref>
* Foreigners own about 35% of U.S. equities, so as much as $700{{nbsp}}billion of the tax cut will go overseas, as corporate after-tax income will flow to these investors as stock buybacks and dividends.<ref>{{cite news|url=https://www.nytimes.com/2017/10/26/opinion/trump-taxes-wealthy-foreigners.html |work=The New York Times|first=Paul|last=Krugman|title=Trump's $700{{nbsp}}Billion Gift to Wealthy Foreigners|date=October 26, 2017}}</ref> * CEOs indicate that tax cuts are not a big factor in investment decisions.<ref name="Krugman_Everybody" /> * Significantly increasing capital expenditures requires an inflow of foreign capital, strengthening the dollar, increasing trade deficits and potentially costing up to 2.5{{nbsp}}million manufacturing and supporting jobs.<ref name="Krugman_TD">{{cite news|url=https://krugman.blogs.nytimes.com/2017/11/14/tax-cuts-and-the-trade-deficit/|work=The New York Times|first=Paul|last=Krugman|title=Tax Cuts And the Trade Deficit|date=November 14, 2017}}</ref>
In November 2017, the University of Chicago asked over 40 economists if U.S. GDP would be substantially higher a decade from now, if either the House or Senate bills were enacted, with the following results: 52% either disagreed or strongly disagreed, while 36% were uncertain and only 2% agreed.<ref>{{Cite web|url=https://www.kentclarkcenter.org/surveys/tax-reform-2/|title=Tax Reform}}</ref>
The Tax Policy Center estimated that GDP would be 0.3% higher in 2027 under the House bill versus current law, while the University of Pennsylvania Penn Wharton budget model estimates approximately 0.3–0.9% for both the House and Senate bills. The very limited effect estimated is due to the expectation of higher interest rates and trade deficits. These estimates are both contrary to the Administration's claims of 10% increase by 2027 (about 1% per year) and Senator Mitch McConnell's estimate of a 4.1% increase.<ref>{{cite news|url=https://www.nytimes.com/2017/11/25/opinion/sunday/the-republican-tax-on-the-future.html|work=The New York Times|department=Editorial|title=The Republican Tax on the Future|date=November 25, 2017}}</ref>
Federal Reserve Bank of NY President and CEO William C. Dudley stated in January 2018: "While this legislation will reduce federal revenues by about 1 percent of GDP in both 2018 and 2019, I anticipate the boost to economic growth will be less than that. Most importantly, most of the tax cuts accrue to the corporate sector and to higher-income households that have a relatively low marginal propensity to consume. This suggests that a significant portion of the tax cuts will be saved, not spent."<ref>{{cite web|url=https://www.newyorkfed.org/newsevents/speeches/2018/dud180111|title=The Outlook for the U.S. Economy in 2018 and Beyond – FEDERAL RESERVE BANK of NEW YORK|website=www.newyorkfed.org|access-date=July 9, 2018}}</ref>
The Trump administration predicted the tax cut would spur corporate capital investment and hiring. One year after enactment of the tax cut, a National Association for Business Economics survey of corporate economists found that 84% reported their firms had not changed their investment or hiring plans due to the tax cut.<ref>{{cite news|url=https://www.reuters.com/article/us-usa-economy-investment-idUSKCN1PM0B0|title=$1.5 trillion U.S. tax cut has no major impact on business capex...|newspaper=Reuters|date=January 28, 2019|via=www.reuters.com}}</ref> Later in 2019, the Economic Policy Institute analyzed the data on business investment from the federal Bureau of Economic Analysis and concluded that, "if the TCJA’s corporate rate cuts were working, we would be seeing a permanent rise in investment. Instead, investment growth is cratering."<ref>{{cite web | url = https://www.epi.org/blog/the-tax-cuts-and-jobs-act-isnt-working-and-theres-no-reason-to-think-that-will-change/ | title = The Tax Cuts and Jobs Act isn't working and there's no reason to think that will change | last = Blair | first = Hunter | date = October 31, 2019 | website = epi.org | publisher = Economic Policy Institute | access-date = 2019-11-30}}</ref> Analysis conducted by ''The New York Times'' in November 2019 found that average business investment was lower after the tax cut than before, and that firms receiving larger tax relief increased investment less than firms receiving smaller tax relief. The analysis also found that since the tax cut firms increased dividends and stock buybacks by nearly three times as much as they increased capital investments.<ref>{{Cite news|url=https://www.nytimes.com/2019/11/17/business/how-fedex-cut-its-tax-bill-to-0.html |title=How FedEx Cut Its Tax Bill to $0|first1=Jim|last1=Tankersley|first2=Peter|last2=Eavis|first3=Ben|last3=Casselman|newspaper=The New York Times|date=November 17, 2019}}</ref>
==== Limited or no wage impact ==== [[File:U.S. real corporate after-tax profits and real household income.png|thumb|right|450px|Corporate after-tax profits (real or adjusted for inflation) have increased about 150% since 2000, yet real median household incomes are flat. The starting point is represented by 100.<ref name="Konczal_1">Konczal, Mike (November 16, 2017). [https://www.vox.com/the-big-idea/2017/11/16/16665604/republicans-tax-reform-labor-capital-wages "Republicans are Weaponizing the Tax Code"]. Vox.</ref><!-- Should this citation point to the source of the underlying FED data? The current citation is to a partisan source, even though the underlying data comes directly from the non-partisan FED. -->]] thumb|right|450px|U.S. corporate profits after-tax from 1970 to Q2 2017. The dollars are near record level (blue line, left axis), while the % GDP is high relative to historical levels (red line, right axis). thumb|right|450px|CBO data on share of U.S. federal revenues collected by tax type from 1967 to 2016. Payroll taxes, paid by all wage earners, have increased as a share of total federal tax revenues, while corporate taxes have fallen. Income taxes have moved in a range, with Presidents Reagan and G.W. Bush lowering income tax rates, and Clinton and Obama raising them for the top incomes.<ref>{{cite web|url=https://www.cbo.gov/publication/52801|title=An Update to the Budget and Economic Outlook: 2017 to 2027 – Congressional Budget Office|website=www.cbo.gov|date=June 29, 2017|access-date=July 9, 2018}}</ref>
Corporate executives indicated that raising wages and investment were not priorities should they have additional funds due to a tax cut. A survey conducted by Bank of America-Merrill Lynch of 300 executives of major U.S. corporations asked what they would do with a corporate tax cut. The top three responses were that they would pay down debt, conduct stock buybacks, and conduct mergers. An informal survey of CEOs by Trump advisor Gary Cohn resulted in a similar response, with few hands raised in response to his request for them to do so if their company would invest more.<ref>{{cite news|url=https://www.washingtonpost.com/news/wonk/wp/2017/11/14/why-arent-the-other-hands-up-a-top-trump-advisers-startling-response-to-ceos-not-doing-what-hed-expect/|newspaper=The Washington Post|first=Heather|last=Long|title='Why aren't the other hands up?' A top Trump adviser's startling response to CEOs not doing what he'd expect|date=November 14, 2017}}</ref>
Former Clinton cabinet Treasury Secretary Larry Summers referred to the analysis provided by the Trump administration of its tax proposal as "...some combination of dishonest, incompetent, and absurd." Summers wrote that the Trump administration's "central claim that cutting the corporate tax rate from 35 percent to 20 percent would raise wages by $4,000 per worker" lacked peer-reviewed support and was "absurd on its face."<ref name="Summers1">{{cite news |last=Summers |first=Lawrence |author-link=Lawrence Summers |date=October 17, 2017 |title=Perspective: Trump's Top Economist's Analysis Isn't Just Wrong, It's Dishonest |url=https://www.washingtonpost.com/news/wonk/wp/2017/10/17/lawrence-summers-trumps-top-economists-tax-analysis-isnt-just-wrong-its-dishonest/ |newspaper=The Washington Post}}</ref>
On December 20, 2017, the day the final bill was passed by the House, Wells Fargo, Fifth Third Bancorp and Western Alliance Bancorp announced they would raise the minimum wage of its workers to $15 an hour upon signing of the bill. A number of companies announced bonuses for workers, including AT&T which said it will give a $1,000 bonus to every single one of its 200,000 employees as a result of the Tax Cut bill. Democratic Senator Chuck Schumer stated that these were the exception to the rule and that AT&T was in litigation with the government over a pending merger. He stated: "There is a reason so few executives have said the tax bill will lead to more jobs, investments, and higher wages—because it will actually lead to share buybacks, corporate bonuses, and dividends."<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2017-12-20/wells-fargo-at-t-try-to-prove-unpopular-tax-cut-goes-to-workers?te=1&nl=dealbook&emc=edit_dk_20171221|title=Wells Fargo, AT&T Try to Show Unpopular Tax Cut Helps Workers|website=Bloomberg News| date=December 20, 2017 |access-date=July 9, 2018}}</ref>
In the immediate aftermath of the passage of the Act, a relatively small number of corporations—many of them involved in mergers disputed by the government or regulatory difficulties—announced pay raises or bonuses to employees, although it is not clear they would not have done so without the tax cut (many companies award raises and bonuses early each year in the normal course of business, after their prior year earnings are known and their new budgets are put in place). About 18 companies in the S&P did so; when companies paid awards to employees, these were usually a small percentage of corporate savings from the Act.<ref>{{cite web|url=https://money.cnn.com/2018/01/02/investing/tax-cuts-bonus-trump/index.html|archive-url=https://web.archive.org/web/20180102232137/http://money.cnn.com/2018/01/02/investing/tax-cuts-bonus-trump/index.html|url-status=dead|archive-date=January 2, 2018|title=Only a small slice of corporate America has shared tax savings with workers so far|first=Matt|last=Egan|date=January 2, 2018|access-date=July 9, 2018}}</ref> A January 2018 study from the firm Willis Towers Watson found that 80% of companies were not "considering giving raises at all."<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2018-01-26/what-companies-are-really-doing-with-their-tax-windfall-so-far|title=What Companies Are Really Doing With Their Tax Windfall (So Far)|website=Bloomberg News| date=January 26, 2018 |access-date=July 9, 2018}}</ref> Bloomberg reported in March 2018 that an estimated 60% of corporate tax savings were going to shareholders, while 15% was going to employees, based on analysis of 51 S&P 500 companies.<ref name="bloomberg.com" /> In July 2018, Bloomberg reported that real wages have actually fallen in the first quarter after the tax bill went into effect.<ref>{{cite news |last=Smith |first=Noah |date=July 18, 2018 |title=Trump's Tax Cut Hasn't Done Anything for Workers|url=https://www.bloomberg.com/view/articles/2018-07-18/trump-s-tax-cut-hasn-t-done-anything-for-workers|work=Bloomberg|access-date=July 27, 2018 }}</ref>
==== Increases income and wealth inequality ==== {{quote box | quote = Overall, the combined effect of the change in net federal revenue and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units. | author = Congressional Budget Office<ref name="CBO_DistFinal"/> | width = 300px }}
''The New York Times'' editorial board explained the tax bill as both consequence and cause of income and wealth inequality: "Most Americans know that the Republican tax bill will widen economic inequality by lavishing breaks on corporations and the wealthy while taking benefits away from the poor and the middle class. What many may not realize is that growing inequality helped create the bill in the first place. As a smaller and smaller group of people cornered an ever-larger share of the nation's wealth, so too did they gain an ever-larger share of political power. They became, in effect, kingmakers; the tax bill is a natural consequence of their long effort to bend American politics to serve their interests." The corporate tax rate was 48% in the 1970s and is 21% under the Act. The top individual rate was 70% in the 1970s and is 37% under the Act. Despite these large cuts, incomes for the working class have stagnated and workers now pay a larger share of the pre-tax income in payroll taxes.<ref name="NYT_Kingmakers">{{cite news|url=https://www.nytimes.com/2017/12/16/opinion/sunday/tax-bill-inequality-created.html |work=The New York Times|department=Editorial|title=The Tax Bill that Inequality Created|date=December 16, 2017}}</ref>
The share of income going to the top 1% has doubled, from 10% to 20%, since the pre-1980 period, while the share of wealth owned by the top 1% has risen from around 25% to 42%.<ref>{{cite web|url=https://eml.berkeley.edu/~saez/saez-UStopincomes-2015.pdf|title=Emmanuel Saez-Striking it Richer-June 30, 2016|access-date=July 9, 2018}}</ref><ref>{{cite web|url=https://eml.berkeley.edu/~saez/SaezZucman2016QJE.pdf|title=Saez&Zucman-Quarterly Journal of Economics-Wealth Inequality in the United States Since 1913 – May 2016|access-date=July 9, 2018}}</ref> Despite President Trump promising to address those left behind, the House and Senate bills would increase economic inequality:
* Sizable corporate tax cuts would flow mostly to wealthy executives and shareholders; * In 2019, a person in the bottom 10% would average a $50 tax cut, while a person in the top 1% gets a $34,000 tax cut; * Up to 13{{nbsp}}million persons losing health insurance or subsidies are overwhelmingly in the bottom 30% of the income distribution; * The top 1% receives approximately 70% of the pass-through income, which will be subject to much lower taxes; * Rolling back the estate tax, which only impacted the top 0.2% of estates in 2016, is a $150{{nbsp}}billion benefit [Note: $83{{nbsp}}billion in final bill] to the ultra-rich over ten years.<ref name="Vox_Inequality">{{cite web|url=https://www.vox.com/policy-and-politics/2017/12/2/16720952/senate-tax-bill-inequality|title=The Republican tax bill will exacerbate income inequality in America|date=December 2, 2017|access-date=July 9, 2018}}</ref> * The top 1% of households by wealth own 40% of stocks; the bottom 80% just 7%, even when including indirect ownership through mutual funds.<ref>{{cite news|url=https://www.nytimes.com/2017/12/21/opinion/tax-cut-santa.html |title=Opinion – Tax-Cut Santa Is Coming to Town|newspaper=The New York Times|date=December 22, 2017|access-date=July 9, 2018|last1=Krugman|first1=Paul}}</ref> * According to a Gallup survey, 52% of Americans owned some stock in 2016, down from 65% in 2007.<ref>{{cite news|url=https://www.npr.org/2017/03/01/517975766/while-trump-touts-stock-market-many-americans-left-out-of-the-conversation|title=While Trump Touts Stock Market, Many Americans Are Left Out Of The Conversation|newspaper=NPR|date=March 2017|access-date=July 9, 2018|last1=Kurtzleben|first1=Danielle}}</ref>
In 2027, if the tax cuts are paid for by spending cuts borne evenly by all families, after-tax income would be 3.0% higher for the top 0.1%, 1.5% higher for the top 10%, −0.6% for the middle 40% (30th to 70th percentile) and −2.0% for the bottom 50%.<ref name="NYT_Ineq2">{{cite news|url=https://www.nytimes.com/2017/12/17/opinion/taxes-inequality-charts.html|work=The New York Times|first=David|last=Leonhardt|title=A Plan to Turbocharge Inequality in Three Charts|date=December 17, 2017}}</ref>
==== International tax standards ==== In November 2017, the OECD reported that the U.S. tax burden was lower in 2016 than the OECD country average, measured as a percentage of GDP:
* Overall taxes, including many state and local taxes, were 26.0% GDP in 2016, versus the OECD average of 34.3%. * Income taxes were 8.5% GDP in 2016, versus the OECD average of 8.9%.<ref>{{cite book|url=http://www.oecd.org/tax/revenue-statistics-2522770x.htm|title=Revenue Statistics: 1965–2016 – en – OECD|website=www.oecd.org|date=2023 |doi=10.1787/9d0453d5-en |isbn=978-92-64-49556-2 |access-date=July 9, 2018}}</ref> * Corporate taxes were 2.3% GDP in 2011, versus the OECD average of 3.0% GDP.<ref>{{cite web|url=https://fivethirtyeight.com/features/u-s-tax-rates-the-big-picture/|archive-url=https://web.archive.org/web/20180313031556/https://fivethirtyeight.com/features/u-s-tax-rates-the-big-picture/|url-status=dead|archive-date=March 13, 2018|title=U.S. Tax Rates: The Big Picture|date=April 15, 2014|access-date=July 9, 2018}}</ref> Despite this, the US corporate tax rate was 35% prior to the passage of the Tax Cuts and Jobs Act, ten percentage points higher than the OECD average of 25%; the TCJA reduced the American corporate tax rate to 21%, four percentage points lower than the OECD average at the time.<ref name="XinhuaBDI" /> Journalist Justin Fox wrote in Bloomberg that Americans may feel financial pressure due to healthcare and college tuition costs, which are much higher than other OECD countries measured as a share of GDP, offsetting the benefit of the already lower tax structure.<ref>{{cite news|url=https://www.bloomberg.com/view/articles/2017-11-27/taxes-are-low-in-the-u-s-but-other-stuff-is-expensive|publisher=Bloomberg|first=Justin|last=Fox|title=Taxes are Low in the U.S., but other stuff is expensive|date=November 27, 2017}}</ref>
===== International trade issues ===== A potential consequence of the proposed tax reform, specifically lowering business taxes, is that (in theory) the U.S. would be a more attractive place for foreign capital (investment money). This inflow of foreign capital would help fund the surge in investment by corporations, one of the stated goals of the legislation. However, a large inflow of foreign capital would drive up the price of the dollar, making U.S. exports more expensive, thus increasing the trade deficit. Paul Krugman estimated this could adversely impact up to 2.5{{nbsp}}million U.S. jobs.<ref name="Krugman_TD" />
According to ''The New York Times'', "wide range of experts agree that cutting taxes is likely to increase the trade deficit" with other countries, which conflicts with the stated priority of the White House to reduce the trade deficit.<ref name=":0">{{cite news|url=https://www.nytimes.com/2017/11/17/us/politics/tax-cuts-trade-deficit-trump.html |title=Trump's Tax Cuts Are Likely to Increase Trade Deficit|last=Appelbaum|first=Binyamin|date=2017-11-17|work=The New York Times|access-date=2017-11-19|issn=0362-4331}}</ref> However, economists widely reject that reducing the trade deficit is necessarily good for the U.S. economy.<ref name=":0" />
===== Foreign objections ===== The finance ministers of the five largest European economies (France, Germany, Italy, Spain and the United Kingdom) wrote a letter to U.S. Treasury Secretary Steve Mnuchin, expressing concern that the tax reforms could trigger a trade war, as they would violate World Trade Organization rules and distort international trade.<ref>{{cite news|url=https://www.telegraph.co.uk/news/2017/12/11/philip-hammond-sides-eu-demand-donald-trump-drops-tax-reforms/ |archive-url=https://ghostarchive.org/archive/20220112/https://www.telegraph.co.uk/news/2017/12/11/philip-hammond-sides-eu-demand-donald-trump-drops-tax-reforms/ |archive-date=January 12, 2022 |url-access=subscription |url-status=live|title=Philip Hammond sides with EU to demand Donald Trump drops tax reforms that risk trade war|last=Rayner|first=Gordon|work=The Telegraph|access-date=2017-12-23}}{{cbignore}}</ref> Similar concerns were voiced by China.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2017-12-11/europeans-tell-mnuchin-u-s-tax-plan-may-break-treaties-trade|title=Europeans Tell Mnuchin the GOP Tax Plan May Break Treaties, Hurt Trade|last=Deen|first=Mark|work=Bloomberg.com|access-date=2017-12-23}}</ref> In response to the Act, German economists called for the German government to enact tax reform and additional subsidies to prevent a loss of jobs and investments to the United States.<ref name="XinhuaBDI">{{cite news|url=http://www.xinhuanet.com/english/2017-12/21/c_136841275.htm|archive-url=https://web.archive.org/web/20171224101303/http://www.xinhuanet.com/english/2017-12/21/c_136841275.htm|url-status=dead|archive-date=December 24, 2017|title=U.S. tax reform poses threat to German jobs, investment, say leading economists|last=Yurou|agency=Xinhua|access-date=2017-12-23}}</ref>
==== Conflict of interest ==== Fact-checkers such as FactCheck.Org, PolitiFact and ''The Washington Post''{{'}}s fact-checker have found that Trump's claims that his economic proposal and tax plan would not benefit wealthy persons like himself were likely false.<ref>{{cite news|url=https://www.washingtonpost.com/news/fact-checker/wp/2017/09/28/fact-checking-president-trumps-tax-speech-in-indianapolis/|newspaper=The Washington Post|first1=Glenn|last1=Kessler|first2=Michelle|last2=Ye Hee Lee|title=Fact-Checking President Trump's tax speech in Indianapolis|date=September 28, 2017}}<br />{{cite news|url=http://www.factcheck.org/2017/11/trump-likely-benefits-tax-bills/|title=Trump Likely Benefits from Tax Bills - FactCheck.org|date=2017-11-30|work=FactCheck.org|access-date=2017-12-02}}<br />{{cite news|url=http://www.politifact.com/truth-o-meter/statements/2017/nov/30/donald-trump/will-gop-tax-bill-cost-donald-trump-fortune-no/|title=Will the GOP tax bill cost Donald Trump 'a fortune'? No|work=@politifact|access-date=2017-12-02}}</ref> An analysis by ''The New York Times'' found that if Trump's tax plan had been in place in 2005 (the one recent year in which his tax returns were leaked), he would have saved $11{{nbsp}}million in taxes.<ref name=":6">{{cite news|url=https://www.nytimes.com/interactive/2017/12/22/us/politics/trump-tax-savings.html|title=Trump Could Save More Than $11 Million Under the New Tax Plan|last=Drucker|first=Jesse|date=2017-12-22|work=The New York Times|access-date=2017-12-22|issn=0362-4331}}</ref> The analysis also found that Trump would save $4.4{{nbsp}}million on his eventual estate tax bill.<ref name=":6" /> Experts say that the financial windfall for the President and his family from this bill is "virtually unprecedented in American political history".<ref>{{cite news|url=https://www.washingtonpost.com/politics/trump-stands-to-save-millions-under-new-tax-measure-experts-say/2017/12/20/6d29a4c4-e59a-11e7-833f-155031558ff4_story.html|title=Trump stands to save millions under new tax measure, experts say|last=Harwell|first=Drew|date=2017-12-20|newspaper=The Washington Post|access-date=2017-12-21|issn=0190-8286}}</ref>
A number of Republican congressmen also stood to benefit personally from the pass-through deduction.<ref name=":7">{{cite news|url=https://www.cnbc.com/2017/12/17/sen-john-cornyn-defends-tax-provision-that-could-benefit-trump.html|title=GOP tax bill includes a provision that could enrich Trump and Republican senators|last=Hirsch|first=Lauren|date=2017-12-17|publisher=CNBC|access-date=2017-12-22}}</ref><ref name=":8">{{cite news|url=https://edition.cnn.com/2017/12/18/politics/tax-plan-bob-corker-vote-timing/index.html|title=Tax voting starts Tuesday, why is Corker voting yes?|last=Mattingly|first=Phil|publisher=CNN|access-date=2017-12-22}}</ref><ref>{{cite news|url=http://www.miaminewtimes.com/news/rep-carlos-curbelo-benefits-from-gop-tax-bill-9930983|title=Miami Rep. Curbelo's Wife Owns Assets That Benefit From GOP Tax Bill's Last-Minute Provision|last=Iannelli|first=Jerry|date=2017-12-22|work=Miami New Times|access-date=2017-12-23}}</ref> Most notably, retiring Tennessee Senator Bob Corker was for some time the sole Republican Senator to oppose the tax plan. Corker stated that he would not support a tax plan that would increase the deficit. However, after Arizona Senator John McCain, who was unable to vote while receiving treatment for brain cancer,<ref name=":8" /> endorsed the bill,<ref>{{cite news|url=https://www.cnn.com/2017/11/30/politics/john-mccain-supports-senate-gop-tax-plan/index.html|title=Sen. John McCain says he'll vote for Senate GOP tax plan|publisher=CNN|first1=Lauren|first2=Phil|last1=Fox|last2=Mattingly|date=November 30, 2017|access-date=May 29, 2018}}</ref> Corker changed his vote to "yes" on the final version of the bill after it was confirmed that the pass-through deduction provision from which he stood to benefit was included in it.<ref name=":7" /><ref name=":8" /> Corker rejected the claim that he traded his vote for provisions that benefited him and said that he had no idea that there were provisions in the bill from which he stood to personally benefit.<ref>{{cite news |last=Salisbury |first=Ian |title=People Are Outraged About the GOP Tax Bill's 'Corker Kickback.' This Is Why |website=Money |url=https://money.com/gop-tax-bill-corker-taxes-kickback/ |url-status=live |access-date=2017-12-22 |archive-url=https://web.archive.org/web/20200925160522/https://money.com/gop-tax-bill-corker-taxes-kickback/ |archive-date=September 25, 2020}}</ref>
==== Tax complication ==== According to ''The New York Times'', "economists and tax experts across the political spectrum warn that the proposed system would invite tax avoidance. The more the tax code distinguishes among types of earnings, personal characteristics or economic activities, the greater the incentive to label income artificially, restructure or switch categories in a hunt for lower rates."<ref>{{cite news|url=https://www.nytimes.com/2017/12/09/business/economy/tax-plans-may-give-your-co-worker-a-better-deal-than-you.html|title=Tax Plans May Give Your Co-Worker a Better Deal Than You|last=Cohen|first=Patricia|date=2017-12-09|work=The New York Times|access-date=2017-12-10|issn=0362-4331}}</ref> According to ''The Wall Street Journal'', the bill's changes to "business and individual taxation could lead to a new era of business reorganization and tax-code gamesmanship with unknown consequences for the economy and federal revenue collection."<ref>{{cite news|url=https://www.wsj.com/articles/for-pass-through-businesses-let-the-tax-games-begin-1513161000|title=For Pass-Through Businesses, Let the (Tax) Games Begin|last1=Rubin|first1=Richard|date=2017-12-13|work=The Wall Street Journal|access-date=2017-12-13|last2=Simon|first2=Ruth|issn=0099-9660}}</ref>
Republicans justified the tax reform initially as an effort to simplify the tax code. Kevin Brady, the chairman of the House Ways and Means Committee, and Speaker Paul Ryan said in November 2017 that they would simplify the tax code so much that 9 in 10 Americans would be able to file their taxes on a postcard.<ref name=":5">{{cite news|url=https://fivethirtyeight.com/features/the-republican-tax-bill-doesnt-actually-simplify-the-tax-code/|archive-url=https://web.archive.org/web/20171220144427/https://fivethirtyeight.com/features/the-republican-tax-bill-doesnt-actually-simplify-the-tax-code/|url-status=dead|archive-date=December 20, 2017|title=The Republican Tax Bill Doesn't Actually Simplify The Tax Code|last=Carmichael|first=Kevin|date=2017-12-20|work=FiveThirtyEight|access-date=2017-12-20}}</ref> President Donald Trump said on December 13, 2017, that people would be able to file their taxes "on a single, little, beautiful sheet of paper".<ref name=":5" /> However, when the final version of the tax legislation passed through houses of Congress, the legislation kept most loopholes intact and did not simplify the tax code.<ref name=":5" /><ref>{{cite news|url=https://money.cnn.com/2017/12/17/pf/taxes/gop-tax-plan-simplify/index.html|archive-url=https://web.archive.org/web/20171220235540/http://money.cnn.com/2017/12/17/pf/taxes/gop-tax-plan-simplify/index.html|url-status=dead|archive-date=December 20, 2017|title=New tax code will still be complicated despite GOP promise to simplify|last=Sahadi|first=Jeanne|publisher=CNNMoney|access-date=2017-12-20}}</ref> The announcements by the House leaders hurt the stock prices of tax preparers, but upon the release of the actual bill, the stock prices of tax preparers sharply increased.<ref name=":5" />
==== Procedural concerns ==== The legislation was passed by Congress with little debate regarding the comprehensive reforming nature of the Act.<ref name="GoodmanCohen">{{cite news|url=https://www.nytimes.com/2017/11/29/business/republican-tax-cut.html |work=The New York Times|first1=Peter S.|last1=Goodman|first2=Patricia|last2=Cohen|title=It Started as a Tax Cut. Now It Could Change American Life|date=November 29, 2017}}</ref><ref name="Hasty">Jim Tankersley & Alan Rappeport, [https://www.nytimes.com/2017/12/01/us/politics/hand-scribbled-tax-bill-outcry.html "A Hasty, Hand-Scribbled Tax Bill Sets Off an Outcry"], ''The New York Times'' (December 1, 2017).]</ref> The 400-page House bill was passed two weeks after the legislation was first released, "without a single hearing" held.<ref>{{cite news|url=https://www.nytimes.com/2017/11/16/us/politics/house-tax-overhaul-bill.htm|work=The New York Times|first1=Thomas|last1=Kaplan|first2=Alan|last2=Rappeport|title=House Passes Tax Bill, as Does Senate Panel|date=November 16, 2017}}</ref> In the Senate, the final version of the bill did not receive a public hearing, "was largely crafted behind closed doors, and was released just ahead of the final vote."<ref name="Golshan">{{cite news|url=https://www.cnbc.com/2017/12/01/republicans-are-handwriting-their-tax-bill-at-the-last-minute.html|work=Vox|first=Tara|last=Golshan|title=Republicans are handwriting their tax bill at the last minute|date=December 1, 2017}}</ref> Republicans rewrote major portions of tax bill just hours before the floor vote, making major changes in order to win the votes of several Republican holdouts.<ref name="Rewrite">Seung Min Kim & Colin Wilhelm, [https://www.politico.com/story/2017/11/30/mccain-to-vote-for-gop-tax-bill-270511 Republicans rewriting tax bill hours before possible vote: Senate GOP leaders are still making major changes to the plan in order to win over several hold-outs], Politico (December 1, 2017).</ref> Many last-minute changes were handwritten on earlier drafts of the bill.<ref name="Golshan" /><ref name="Hasty" /> The revisions appeared "first in the lobbying shops of K Street, which sent back copies to some Senate Democrats, who were left to take to social media in protest regarding being asked to vote in a matter of hours on a massive bill that had yet to be shared with them directly."<ref name="Hasty" />
The rushed approval of the legislation prompted an outcry from Democrats.<ref name="Hasty" /><ref name="Golshan" /><ref name="Rewrite" /><ref name="WangAbsurd">{{cite news|url=https://www.washingtonpost.com/news/politics/wp/2017/12/02/democrats-fume-over-absurd-gop-tax-bill-full-of-last-minute-handwritten-edits/|newspaper=The Washington Post|first=Amy|last=B. Wang|title=Democrats fume over 'absurd' GOP tax bill full of last-minute handwritten edits|date=December 2, 2017}}</ref> Senate Minority Leader Charles Schumer (D-NY) proposed giving senators more time to read the legislation, but this motion failed after every Republican voted no.<ref name="WangAbsurd" /> Requests to wait until incoming Democratic Senator Doug Jones of Alabama could vote on the bill were also denied. Some commentators also criticized the process. ''The New York Times'' editorial board wrote that the Senate's move to rapidly approve the bill "is not how lawmakers are supposed to pass enormous pieces of legislation" and contrasted the bill to the 1986 tax bill, in which "Congress and the Reagan administration worked across party lines, produced numerous drafts, held many hearings and struck countless compromises."<ref>{{cite news|url=https://www.nytimes.com/2017/11/29/opinion/senate-tax-bill-problems-rush.html|work=The New York Times|department=Editorial|title=The Senate Is Rushing to Pass Its Tax Bill Because It Stinks|date=November 29, 2017}}</ref> Bloomberg columnist Al Hunt classified the legislation as a "slipshod product, legislated with minimal transparency" that was "rushed so fast through a short-circuited lawmaking process" in which many members of Congress who voted in favor of the bill did not fully understand what they had done.<ref>Albert R. Hunt, [https://www.bloomberg.com/view/articles/2017-11-29/republican-haste-warps-tax-bills Republican Haste Warps Tax Bills], Bloomberg View (November 29, 2017).</ref>
==== Name of the law ==== The clause establishing the bill's short title was dropped after Senator Bernie Sanders (D-VT) filed an objection under the Byrd Rule to the Senate Parliamentarian, claiming the section was extraneous.<ref name="Watkins" /><ref>{{cite web|last=Wessel|first=David|date=2021-02-05|title=What is reconciliation in Congress?|url=https://www.brookings.edu/blog/up-front/2021/02/05/what-is-reconciliation-in-congress/|access-date=2021-02-12|website=Brookings|language=en-US}}</ref> As a result, the name "Tax Cuts and Jobs Act", though widely used, is not contained in the bill, which is officially referred to by its long title, or as Public Law 115-97.
==== Federal Reserve ==== Federal Reserve officials had indicated earlier in 2017 that aggressive tax cuts could increase the pace of interest rate increases already planned. Higher interest rates make borrowing more expensive, slowing economic growth (GDP), other things equal. The Fed also raises interest rates to help offset the risk of inflation in a growing economy near full employment. However, as the tax plan became clearer and its impact on the economy was judged to be relatively minor, the Fed indicated that a plan to raise interest rates incrementally as many as three times in 2018 would not be changed.<ref>{{cite news|url=https://www.nytimes.com/2017/12/13/business/economy/fed-interest-rates.html|title=Fed Predicts Modest Economic Growth From Tax Cut|first=Binyamin|last=Appelbaum|newspaper=The New York Times|date=December 13, 2017|access-date=July 9, 2018}}</ref><ref>Binyamin Appelbaum, [https://www.nytimes.com/2016/12/13/business/economy/federal-reserve-interest-rates.html "A Trump Economic Boom? The Fed May Stand in the Way"], ''The New York Times'' (December 13, 2016).</ref>
===Views of economists=== While there was no clear consensus among academic economists as to whether the tax plan would benefit the economy to the degree that first Trump administration predicted, there was a consensus that it would widen public deficits and economic inequality.<ref>{{cite news |last=Mankiw |first=N. Gregory |date=2017-11-03 |title=How to Improve the Trump Tax Plan |work=The New York Times |url=https://www.nytimes.com/2017/11/03/business/how-to-improve-the-trump-tax-plan.html |access-date=2017-11-17 |issn=0362-4331}}</ref><ref>{{cite news |date=2017-09-28 |title=Most Economists Agree: Trump Tax Plan Will Widen Budget Deficit |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2017-09-28/most-economists-agree-trump-tax-plan-will-widen-budget-deficit |access-date=2017-11-17}}</ref><ref>{{cite news |last=Soergel |first=Andrew |date=September 29, 2017 |title=Would a Trump Tax Cut Boost Economic Growth? |work=U.S. News & World Report |url=https://www.usnews.com/news/economy/articles/2017-09-29/would-a-trump-tax-cut-boost-economic-growth}}</ref><!-- The claim of the altered sentence was that 'most academic economists' held a specific negative view of the bill's likely general impact relative to the claims of the Trump administration. The article did not support the claim, but seemed to offer a non-committal acknowledgement of support for both proponents for and detractors from the benefits of tax cuts on growth. I retained the citation and altered the sentence to reflect the ambivalent tone in the article.
I also altered 'economic inequalities' to 'economic inequality'. -->
In a survey conducted by the University of Chicago's Initiative on Global Markets, 37 out of 38 economists interviewed stated that they thought the Act would cause a rapid increase in the national debt. The one dissenting economist later changed his mind.<ref>{{Cite news |last=Stein |first=Jeff |date=2017-11-22 |title=37 of 38 economists said the GOP tax plans would grow the debt. The 38th misread the question. |newspaper=The Washington Post |url=https://www.washingtonpost.com/news/wonk/wp/2017/11/22/37-of-38-economists-said-the-gop-tax-plans-would-grow-the-debt-the-38th-misread-the-question/ |access-date=2018-04-02 |issn=0190-8286}}</ref> Conversely, only one economist (Stanford's Darrell Duffie) out of the 38 agreed with the statement: "If the US enacts a tax bill similar to those currently moving through the House and Senate—and assuming no other changes in tax or spending policy—US GDP will be substantially higher a decade from now than under the status quo".<ref>{{cite web |date=November 2017 |title=Tax Reform |url=http://www.igmchicago.org/surveys/tax-reform-2 |access-date=2018-04-02 |website=www.igmchicago.org |archive-date=November 21, 2017 |archive-url=https://web.archive.org/web/20171121200440/http://www.igmchicago.org/surveys/tax-reform-2 |url-status=dead }}</ref>
Four winners of the Nobel Prize in Economics have spoken out against the legislation: Joseph Stiglitz,<ref>{{cite news |last=Stiglitz |first=Joseph E. |date=2017-10-04 |title=Déjà Voodoo by Joseph E. Stiglitz – Project Syndicate |work=Project Syndicate |url=https://www.project-syndicate.org/commentary/republican-tax-reform-voodoo-economics-by-joseph-e--stiglitz-2017-10 |access-date=2017-11-17}}</ref> Paul Krugman,<ref name="Krugman_Everybody" /><ref>{{Cite news |last=Krugman |first=Paul |date=2019-01-01 |title=Opinion {{!}} The Trump Tax Cut: Even Worse Than You've Heard |work=The New York Times |url=https://www.nytimes.com/2019/01/01/opinion/the-trump-tax-cut-even-worse-than-youve-heard.html |access-date=2019-01-23 |issn=0362-4331}}</ref> Richard Thaler,<ref>{{cite news |date=2017-10-10 |title=Nobel Winner Thaler Takes a Jab at Trump |work=Bloomberg.com |url=https://www.bloomberg.com/news/articles/2017-10-10/nobel-economist-takes-a-jab-at-trump-s-confidence-knowledge |access-date=2017-11-17}}</ref> and Angus Deaton.<ref>{{cite news |date=2017-05-13 |title=Nobel winning economist says Trump's plans aggravate income inequality |work=Newsweek |url=http://www.newsweek.com/donald-trump-economy-trump-budget-trump-tax-plan-nobel-winner-angus-deaton-608807 |access-date=2017-11-17}}</ref>
Princeton economist Alan Blinder, who served as Vice Chair of the Federal Reserve System from 1994 to 1996, argued, in an article published by ''The Wall Street Journal'', that "almost everything was wrong" with the Trump Tax Cut and that "it blew a large hole in the federal deficit".<ref>{{Cite news |last=Blinder |first=Alan S. |date=2017-12-27 |title=Almost Everything Is Wrong With the New Tax Law |work=Wall Street Journal |url=https://www.wsj.com/articles/almost-everything-is-wrong-with-the-new-tax-law-1514416503 |access-date=2019-01-23 |issn=0099-9660}}</ref>
A group of 137 economists signed an open letter expressing support for the bill; the letter was touted by President Trump, House Speaker Paul Ryan and the Senate Finance Committee as support for the legislation among economists;<ref>{{cite news |last=reform |first=The RATE Coalition, a group of businesses calling for tax |date=2017-11-29 |title=137 economists sign open letter to Congress supporting GOP tax reform bill |publisher=CNBC |url=https://www.cnbc.com/2017/11/29/137-economists-support-gop-tax-reform-bill-in-open-letter-commentary.html |access-date=2017-12-02}}</ref> the letter was criticized by left-liberal publications that cited independent research which contradicted some of its claims and alleged that it contained signatories who did not exist.<ref name=":22">{{cite web |last=Fang |first=Lee |date=2017-12-01 |title=GOP's List of Economists Backing Tax Cut Includes Ghosts, Office Assistants, Ex-Felons, and a Sprinkling of Real Economists |url=https://theintercept.com/2017/12/01/gops-list-of-economists-backing-tax-cut-includes-ghosts-office-assistants-ex-felons-and-a-sprinkling-of-real-economists/ |access-date=2017-12-02 |website=The Intercept}}</ref> A group of nine economists (largely from the Reagan and Bush administrations) wrote a letter which estimated 3 percent growth from the reduction in the corporate tax rate within a decade; the letter was challenged by Harvard economists Larry Summers and Jason Furman (both of whom served in the Obama administration), and the nine economists appeared to back off from their original claims.<ref>{{cite news |title=Economists Seem to Back Off Growth Claim for Tax Cuts |work=Bloomberg Quint |url=https://www.bloombergquint.com/global-economics/2017/12/01/economists-seem-to-back-off-economic-growth-claim-for-tax-cuts |access-date=2017-12-10}}</ref>
According to ''The Guardian'', thirteen tax law professors from around the US, in a 68-page study, called the law's process "rushed and secretive" that resulted "in deeply flawed legislation".<ref>{{cite web |last1=Cary |first1=Peter |last2=Holmes |first2=Alan |date=2019-04-30 |title=Workers barely benefited from Trump's sweeping tax cut, investigation shows |url=http://www.theguardian.com/us-news/2019/apr/30/trump-tax-cut-law-investigation-worker-benefits |access-date=2020-08-30 |website=The Guardian |language=en}}</ref><ref>{{cite web |date=April 30, 2019 |title=The secret saga of Trump's tax cuts |url=https://publicintegrity.org/inequality-poverty-opportunity/taxes/trumps-tax-cuts/the-secret-saga-of-trumps-tax-cuts/ |access-date=2020-08-30 |website=Center for Public Integrity |language=en-us}}</ref>
=== Political significance ===
In November 2017, Senator Lindsey Graham (R-SC) said that "financial contributions will stop" flowing to the Republican Party if tax reform is unable to be enacted.<ref>{{cite web |last1=Savransky |first1=Rebecca |date=November 9, 2017 |title=Graham: 'Financial contributions will stop' if GOP doesn't pass tax reform |url=https://thehill.com/policy/finance/359606-graham-financial-contributions-will-stop-if-gop-doesnt-pass-tax-reform/ |access-date=November 10, 2017 |work=The Hill}}</ref> This echoed comments by Representative Chris Collins (R-NY), who said, "My donors are basically saying 'get it done or don't ever call me again.'"<ref>{{cite news |last1=Gordon |first1=Marcy |last2=Werner |first2=Erica |title=Changes to House tax bill on child care benefits, credits |agency=Associated Press |url=http://hosted2.ap.org/COGRA/e109e277e48c4e219e07a1d4710177b3/Article_2017-11-07-US--Congress-Taxes/id-0dfd8674b352437185f68e76eb633566 |access-date=November 10, 2017}}</ref>
==Excluded provisions before passage== Some provisions were initially proposed for inclusion in the bill, but were excluded before final passage.
===Tuition waiver exemption=== The bill that passed the House had been criticized for its significant negative impact on graduate students. Graduate students in private universities could have seen their effective tax rate go above 41.9%, a rate higher than what even the richest of Americans typically pay.<ref>{{cite news|url=https://www.forbes.com/sites/startswithabang/2017/11/07/the-gop-tax-plan-will-destroy-graduate-education/#66f68ac63d2f|title=The GOP Tax Plan Will Destroy Graduate Education|work=Forbes|access-date=2017-11-09}}</ref> The change was due to a provision in the bill that would have repealed the deduction for qualified tuition and related expenses, meaning that graduate students' waived tuition would be viewed as taxable income. Given that their stipends are significantly less than the waived tuition, this would typically increase their taxes by 30–60% for public universities and hundreds of percent for private ones.<ref>{{cite news|url=https://www.theverge.com/2017/11/7/16619246/tax-bill-trump-gop-cuts-and-jobs-act-graduate-students-tuition-waiver-reductions|title=The Republican tax plan could financially devastate graduate students|work=The Verge|access-date=2017-11-08}}</ref><ref>{{cite news|url=https://www.insidehighered.com/news/2017/11/07/grad-students-and-policy-experts-say-taxing-graduate-students-tuition-waivers-would|title=Taxing a Coupon|work=Inside Higher Ed|access-date=2017-11-08}}</ref> The Senate version of the bill did not contain these provisions.<ref name="Timmer">{{cite news|url=https://arstechnica.com/science/2017/11/tax-bill-that-passed-the-house-would-cripple-training-of-scientists/|work=Ars Technica|first=John|last=Timmer|title=Tax bill that passed the House would cripple training of scientists|date=November 17, 2017}}</ref>
The House bill's disadvantageous treatment of graduate students was criticized because of its projected negative effect on the training of U.S. scientists.<ref name="Timmer" /> The bill's impact on U.S. science and innovation had been criticized by Stanford professor emeritus Burton Richter, a winner of the Nobel Prize in Physics and the National Medal of Science, who critiqued the bill's negative impact on Americans seeking advanced degrees and wrote that the budget impact of the tax cuts would force a dramatic reduction in federal funding for scientific research.<ref>{{cite news|url=https://thehill.com/blogs/congress-blog/economy-budget/360662-why-the-tax-bill-is-bad-for-science-innovation-and-america/|work=The Hill|first1=Michael|last1=S. Lubell|first2=Burton|last2=Richter|title=Why the tax bill Is bad for science, innovation and America|date=November 16, 2017}}</ref>
The final version of the Act reflected the Senate's language in this area, maintaining the prior law's tax exemption for tuition waivers.<ref>{{cite web|url=https://www.colorado.edu/today/2017/12/20/update-tax-cuts-and-jobs-act-and-cu-boulder|title=An update on the Tax Cuts and Jobs Act and CU Boulder|work=CU Boulder Today|publisher=Strategic Relations and Communications, University of Colorado Boulder|date=December 20, 2017|access-date=April 18, 2018}}</ref>
===Automatic spending cuts averted/PAYGO=== Under the Statutory Pay-as-You-Go Act of 2010 (PAYGO), laws that increase the federal deficit will trigger automatic spending cuts unless Congress votes to waive them. Because the Act adds $1.5{{nbsp}}trillion to the deficit, automatic cuts of $150{{nbsp}}billion per year over ten years would have applied, including a $25{{nbsp}}billion annual cut to Medicare. Because the PAYGO waiver is not allowed in a reconciliation bill, it requires separate legislation which requires 60 votes in the Senate to end a filibuster.<ref>{{cite news|url=https://www.washingtonpost.com/news/wonk/wp/2017/11/14/how-the-gop-tax-plan-could-leave-the-party-in-need-of-democrats-help/|title=Democrats have leverage in one part of the GOP tax cut process|last=Long|first=Heather|date=2017-11-14|newspaper=The Washington Post|access-date=2017-12-21|issn=0190-8286}}</ref><ref>{{cite news |url=https://www.nytimes.com/interactive/2017/11/29/upshot/paygo-medicare-cuts-tax-bill.html| title=The Tax Bill's Automatic Spending Cuts|last=Sanger-Katz|first=Margot|date=2017-11-29|work=The New York Times|access-date=2017-12-21|issn=0362-4331}}</ref> If Congress had not passed the waiver, it would have been the first time that statutory PAYGO sequestration would have occurred.<ref>{{cite news|url=https://www.politico.com/story/2017/11/30/tax-bill-spending-cuts-gop-congress-274337|title=Tax bill could trigger historic spending cuts|last1=Cancryn|first1=Adam|date=2017-11-30|work=Politico|access-date=2017-12-21|last2=Ferris|first2=Sarah}}</ref> However, the PAYGO waiver was included in the continuing resolution passed by Congress on December 22 and signed by President Trump.<ref>{{cite news|url=https://www.bloomberg.com/news/articles/2017-12-21/republican-squabbles-resurface-on-funding-after-unity-on-taxes|title=House GOP Pushes Funding Gambit Day Ahead of Shutdown Deadline|last1=Edgerton|first1=Anna|date=2017-12-21|work=Bloomberg L.P.|access-date=2017-12-22|last2=Wasson|first2=Erik}}</ref><ref name="PAYGO_Waived">{{cite web|url=https://www.cnbc.com/2017/12/22/trump-signs-gop-tax-plan-short-term-government-funding-bill.html|title=Trump signs GOP tax plan and short-term government funding bill on his way out of town|first=Christina|last=Wilkie |publisher=CNBC |date=December 22, 2017|access-date=July 9, 2018}}</ref>
== Public opinion == Analysis by ''FiveThirtyEight'' in November 2017 found the pending tax law to be the least-popular major tax bill in at least 36 years, including the tax increases of 1990 and 1993.<ref>{{cite web|url=https://fivethirtyeight.com/features/the-gop-tax-cuts-are-even-more-unpopular-than-past-tax-hikes/|archive-url=https://web.archive.org/web/20171129170118/https://fivethirtyeight.com/features/the-gop-tax-cuts-are-even-more-unpopular-than-past-tax-hikes/|url-status=dead|archive-date=November 29, 2017|title=The GOP Tax Cuts Are Even More Unpopular Than Past Tax Hikes|date=November 29, 2017|access-date=July 9, 2018}}</ref> Apart from February 12, 2018, the RealClearPolitics composite of polls has indicated that at least a plurality of Americans has disliked the law from October 2017 through December 2018.<ref name="realclearpoliticsPolls_20181221">{{cite news|url= https://www.realclearpolitics.com/epolls/other/trump_republicans_tax_reform_law-6446.html#polls|date=February 5, 2019|access-date=February 11, 2019|work= RealClearPolitics |title=Trump Republicans Tax Reform Law|series=Polls}}</ref>
{| class="wikitable sortable" style="text-align:center;" |- ! rowspan="2" | Poll source ! colspan="2" | Fieldwork ! colspan="2" rowspan="2" | Support/Approve ! colspan="2" rowspan="2" | Oppose/Disapprove ! class="unsortable" rowspan="2" | {{Refh}} |- ! Start ! End |- | The New York Times/SurveyMonkey | {{dts|link=off|February 5, 2018}} | {{dts|link=off|February 11, 2018}} | {{bartable|51|%|1|1em|background:green}} | {{bartable|46|%|1|1em|background:red}} | <ref>{{cite news|last2=Tankersley|first2=Jim|last1=Casselman|first1=Ben|title=Tax Overhaul Gains Public Support, Buoying Republicans|url=https://www.nytimes.com/2018/02/19/business/economy/tax-overhaul-survey.html |work=The New York Times|date=February 19, 2018}}</ref> |- | Monmouth University | {{dts|link=off|January 28, 2018}} | {{dts|link=off|January 30, 2018}} | {{bartable|44|%|1|1em|background:green}} | {{bartable|44|%|1|1em|background:red}} | <ref>{{cite web|title=Trump Rating Ticks Up; Support for Tax Plan Increases|url=https://www.monmouth.edu/polling-institute/reports/MonmouthPoll_US_013118/ |publisher=Monmouth University|date=January 31, 2018}}</ref> |- | Harvard/Harris Poll | {{dts|link=off|January 17, 2018}} | {{dts|link=off|January 19, 2018}} | {{bartable|47|%|1|1em|background:green}} | {{bartable|53|%|1|1em|background:red}} | <ref>{{cite web|title=Monthly Harvard-Harris Poll: January 2018 Re-Field|url=http://harvardharrispoll.com/wp-content/uploads/2018/01/Final_HHP_Jan2018-Refield_RegisteredVoters_Topline.pdf|publisher=Harvard–Harris Poll|date=January 20, 2018}}</ref> |- | Politico/Morning Consult | {{dts|link=off|January 11, 2018}} | {{dts|link=off|January 16, 2018}} | {{bartable|45|%|1|1em|background:green}} | {{bartable|34|%|1|1em|background:red}} | <ref>{{cite web|last=Eckert|first=Toby|title=GOP tax plan fails to crack a majority in new poll|url=https://www.politico.com/story/2018/01/17/poll-republican-tax-plan-popularity-289339|publisher=Politico|work=Morning Consult|date=January 17, 2018}}</ref> |- | GQR Research | {{dts|link=off|January 6, 2018}} | {{dts|link=off|January 11, 2018}} | {{bartable|43|%|1|1em|background:green}} | {{bartable|46|%|1|1em|background:red}} | <ref>{{cite web|title=Democracy Corps|url=http://www.democracycorps.com/attachments/article/1079/Dcorp%20National%20Phone%20Pre-Test%20011118%20FQ_for%20release.pdf |publisher=GQR Research|access-date=January 26, 2018|archive-url=https://web.archive.org/web/20180329120239/http://www.democracycorps.com/attachments/article/1079/Dcorp%20National%20Phone%20Pre-Test%20011118%20FQ_for%20release.pdf|archive-date=March 29, 2018|url-status=dead}}</ref> |- | The New York Times/SurveyMonkey | {{dts|link=off|January 1, 2018}} | {{dts|link=off|January 5, 2018}} | {{bartable|46|%|1|1em|background:green}} | {{bartable|49|%|1|1em|background:red}} | <ref>{{cite news|last2=Tankersley|first2=Jim|last1=Casselman|first1=Ben|title=Poll Finds Upturn in Sentiment on Tax Overhaul and Economy|url=https://www.nytimes.com/2018/01/16/business/economy/tax-economy-survey.html |work=The New York Times|date=January 16, 2018}}</ref> |- | The Economist/YouGov | {{dts|link=off|December 31, 2017}} | {{dts|link=off|January 2, 2018}} | {{bartable|37|%|1|1em|background:green}} | {{bartable|39|%|1|1em|background:red}} | <ref>{{cite web|title=The Economist/YouGov Poll|url=http://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/fzbo62v6dm/econTabReport.pdf|publisher=YouGov|access-date=January 4, 2018|date=January 2, 2018}}</ref> |- | McLaughlin & Associates | {{dts|link=off|December 14, 2017}} | {{dts|link=off|December 18, 2017}} | {{bartable|49|%|1|1em|background:green}} | {{bartable|41|%|1|1em|background:red}} | <ref>{{cite web|title=December National Survey Results|url=http://mclaughlinonline.com/2017/12/20/december-national-survey-results/|date=December 19, 2017}}</ref> |- | Politico/Morning Consult | {{dts|link=off|December 14, 2017}} | {{dts|link=off|December 18, 2017}} | {{bartable|42|%|1|1em|background:green}} | {{bartable|39|%|1|1em|background:red}} | <ref>{{cite web|last1=Shepard|first1=Steven|title=Poll: Voters split on GOP tax bill|url=https://www.politico.com/story/2017/12/19/poll-gop-tax-bill-304831|publisher=Politico|date=December 19, 2017}}</ref> |- | CNN/SSRS | {{dts|link=off|December 14, 2017}} | {{dts|link=off|December 17, 2017}} | {{bartable|33|%|1|1em|background:green}} | {{bartable|55|%|1|1em|background:red}} | <ref>{{cite web|title=CNN December 2017|url=http://cdn.cnn.com/cnn/2017/images/12/18/rel12a.-.trump.and.taxes.pdf|publisher=CNN|access-date=December 19, 2017|date=December 19, 2017}}</ref> |- | NBC News/''The Wall Street Journal'' | {{dts|link=off|December 13, 2017}} | {{dts|link=off|December 15, 2017}} | {{bartable|24|%|1|1em|background:green}} | {{bartable|41|%|1|1em|background:red}} | <ref>{{cite web|title=Study #17505|url=http://msnbcmedia.msn.com/i/MSNBC/Sections/17505%20NBCWSJ%20December%20Poll.pdf|work=NBC News|access-date=December 20, 2017|archive-url=https://web.archive.org/web/20171219221104/http://msnbcmedia.msn.com/i/MSNBC/Sections/17505%20NBCWSJ%20December%20Poll.pdf|archive-date=December 19, 2017|url-status=dead}}</ref> |- | Public Opinion Strategies (R) | {{dts|link=off|December 12, 2017}} | {{dts|link=off|December 16, 2017}} | {{bartable|40|%|1|1em|background:green}} | {{bartable|49|%|1|1em|background:red}} | <ref name="Drucker">{{cite web|last1=Drucker|first1=David M.|title=Republican poll shows political challenges, possible benefits, of passing tax bill|url=http://www.washingtonexaminer.com/republican-poll-shows-political-challenges-possible-benefits-of-passing-tax-bill/article/2643873|work=Washington Examiner|access-date=December 19, 2017|date=December 18, 2017}}</ref> |- | Monmouth University | {{dts|link=off|December 10, 2017}} | {{dts|link=off|December 12, 2017}} | {{bartable|26|%|1|1em|background:green}} | {{bartable|47|%|1|1em|background:red}} | <ref name="Monmouth December 18">{{cite web|title=Half The Public Say Their Taxes Will Go Up Under GOP Plan|url=https://www.monmouth.edu/polling-institute/reports/MonmouthPoll_US_121817/|publisher=Monmouth University|access-date=December 19, 2017|location=West Long Branch|date=December 18, 2017}}</ref> |- | Quinnipiac University | {{dts|link=off|December 6, 2017}} | {{dts|link=off|December 11, 2017}} | {{bartable|26|%|1|1em|background:green}} | {{bartable|55|%|1|1em|background:red}} | <ref>{{cite web|title=Support for GOP Tax Plan Could Hurt Candidates, Quinnipiac University National Poll Finds; U.S. Voters Say 7-1 DACA Immigrants Should Stay|url=https://poll.qu.edu/images/polling/us/us12132017_upil22.pdf|publisher=Quinnipiac University|access-date=December 14, 2017|date=December 13, 2017}}</ref> |- | ''USA Today''/Suffolk University | {{dts|link=off|December 5, 2017}} | {{dts|link=off|December 9, 2017}} | {{bartable|32|%|1|1em|background:green}} | {{bartable|48|%|1|1em|background:red}} | <ref>{{cite web|last1=Page|first1=Susan|title=Poll: Most Americans doubt GOP bill will cut their taxes or boost the economy|url=https://www.usatoday.com/story/news/2017/12/10/poll-most-americans-doubt-gop-bill-cut-their-taxes-boost-economy/938355001/|work=USA Today|access-date=December 12, 2017|date=December 10, 2017}}</ref> |- | Vice News/SurveyMonkey | {{dts|link=off|December 5, 2017}} | {{dts|link=off|December 6, 2017}} | {{bartable|39|%|1|1em|background:green}} | {{bartable|56|%|1|1em|background:red}} | <ref>{{cite web|last1=Thomas|first1=Shawna|title=Why the GOP tax bill is so unpopular|url=https://www.vice.com/en/article/exclusive-only-22-of-americans-think-the-gop-tax-plan-will-lower-their-taxes/|publisher=Vice News|access-date=December 14, 2017|date=December 13, 2017}}</ref> |- | Reuters/Ipsos | {{dts|link=off|December 3, 2017}} | {{dts|link=off|December 7, 2017}} | {{bartable|31|%|1|1em|background:green}} | {{bartable|49|%|1|1em|background:red}} | <ref>{{cite news|last1=Becker|first1=Amanda|last2=Kahn|first2=Chris|title=Nearly half of Americans still oppose Republican tax bill: Reuters/Ipsos poll|url=https://www.reuters.com/article/us-usa-tax-poll/nearly-half-of-americans-still-oppose-republican-tax-bill-reuters-ipsos-poll-idUSKBN1E52HZ|work=Reuters|access-date=December 12, 2017|date=December 11, 2017}}</ref> |- | CBS News | {{dts|link=off|December 3, 2017}} | {{dts|link=off|December 5, 2017}} | {{bartable|35|%|1|1em|background:green}} | {{bartable|53|%|1|1em|background:red}} | <ref>{{cite web|last1=De Pinto|first1=Jennifer|last2=Backus|first2=Fred|last3=Khanna|first3=Kabir|last4=Salvanto|first4=Anthony|title=CBS News poll: Americans say tax plan helps wealthy, not middle class|url=https://www.cbsnews.com/news/cbs-news-poll-americans-say-tax-plan-helps-wealthy-not-middle-class/|work=CBS News|access-date=December 8, 2017|date=December 7, 2017}}</ref> |- | Gallup | {{dts|link=off|December 1, 2017}} | {{dts|link=off|December 2, 2017}} | {{bartable|29|%|1|1em|background:green}} | {{bartable|56|%|1|1em|background:red}} | <ref>{{cite web|last1=Saad|first1=Lydia|title=Independents, Democrats Not on Board With GOP Tax Plan|url=http://news.gallup.com/poll/223238/independents-democrats-not-board-gop-tax-plan.aspx|publisher=Gallup|access-date=December 8, 2017|date=December 5, 2017}}</ref> |- | Quinnipiac University | {{dts|link=off|November 29, 2017}} | {{dts|link=off|December 4, 2017}} | {{bartable|29|%|1|1em|background:green}} | {{bartable|53|%|1|1em|background:red}} | <ref>{{cite web|title=GOP Tax Plan Benefits Rich, U.S. Voters Say Almost 3-1, Quinnipiac University National Poll Finds; Trump Job Approval Stuck at 35 Percent|url=https://poll.qu.edu/images/polling/us/us12052017_ufrt567.pdf|publisher=Quinnipiac University|access-date=December 8, 2017|date=December 5, 2017}}</ref> |- | Reuters/Ipsos | {{dts|link=off|November 23, 2017}} | {{dts|link=off|November 27, 2017}} | {{bartable|29|%|1|1em|background:green}} | {{bartable|49|%|1|1em|background:red}} | <ref>{{cite news|last1=Becker|first1=Amanda|last2=Kahn|first2=Chris|title=Nearly half of Americans oppose Republican tax bill: Reuters/Ipsos poll|url=https://www.reuters.com/article/us-usa-tax-poll/nearly-half-of-americans-oppose-republican-tax-bill-reuters-ipsos-poll-idUSKBN1DT3BX|work=Reuters|access-date=December 8, 2017|date=November 29, 2017}}</ref> |- | Harvard/Harris Poll | {{dts|link=off|November 11, 2017}} | {{dts|link=off|November 14, 2017}} | {{bartable|46|%|1|1em|background:green}} | {{bartable|54|%|1|1em|background:red}} | <ref>{{cite web|title=Monthly Harvard CAPS-Harris Poll: November 2017|url=http://harvardharrispoll.com/wp-content/uploads/2017/11/Final-HHP-November_Topline_No-Banners_Registered-Voters.pdf|publisher=Harvard–Harris Poll|access-date=December 13, 2017|date=November 15, 2017}}</ref> |- | Politico/Morning Consult | {{dts|link=off|November 9, 2017}} | {{dts|link=off|November 11, 2017}} | {{bartable|47|%|1|1em|background:green}} | {{bartable|40|%|1|1em|background:red}} | <ref>{{cite web|last1=Shepard|first1=Steven|title=Poll: Voters think Trump will benefit from tax plan|url=https://www.politico.com/story/2017/11/15/trump-poll-tax-plan-244901|publisher=Politico|access-date=December 8, 2017|date=November 15, 2017}}</ref> |- | Quinnipiac University | {{dts|link=off|November 7, 2017}} | {{dts|link=off|November 13, 2017}} | {{bartable|25|%|1|1em|background:green}} | {{bartable|52|%|1|1em|background:red}} | <ref>{{cite web|title=Latest Massacre Drives Gun Control Support to New High, Quinnipiac University National Poll Finds; Voters Reject GOP Tax Plan 2-1|url=https://poll.qu.edu/images/polling/us/us11152017_ucp261.pdf|publisher=Quinnipiac University|access-date=December 8, 2017|date=November 15, 2017}}</ref> |- | ''The Economist''/YouGov | {{dts|link=off|November 5, 2017}} | {{dts|link=off|November 7, 2017}} | {{bartable|30|%|1|1em|background:green}} | {{bartable|40|%|1|1em|background:red}} | <ref>{{cite web|title=The Economist/YouGov Poll|url=https://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/43ynvygxvv/econToplines.pdf|publisher=YouGov|access-date=December 8, 2017|date=November 8, 2017}}</ref> |- | Politico/Morning Consult | {{dts|link=off|November 2, 2017}} | {{dts|link=off|November 6, 2017}} | {{bartable|45|%|1|1em|background:green}} | {{bartable|36|%|1|1em|background:red}} | <ref>{{cite web|last1=Shepard|first1=Steven|title=Poll: Support for GOP tax plan ticks down but remains positive|url=https://www.politico.com/story/2017/11/09/poll-support-for-gop-tax-plan-ticks-down-but-remains-positive-244715|publisher=Politico|access-date=December 8, 2017|date=November 9, 2017}}</ref> |- | CNN/SSRS | {{dts|link=off|November 2, 2017}} | {{dts|link=off|November 5, 2017}} | {{bartable|31|%|1|1em|background:green}} | {{bartable|45|%|1|1em|background:red}} | <ref>{{cite web|title=CNN November 2017|url=http://cdn.cnn.com/cnn/2017/images/11/07/rel11b_-_2018_and_taxes.pdf|publisher=CNN|access-date=December 19, 2017|date=November 7, 2017}}</ref> |- | ABC/''The Washington Post'' | {{dts|link=off|October 26, 2017}} | {{dts|link=off|November 1, 2017}} | {{bartable|33|%|1|1em|background:green}} | {{bartable|50|%|1|1em|background:red}} | <ref>{{cite news|last1=Clement|first1=Scott|last2=Guskin|first2=Emily|title=Republicans' tax overhaul pitch faces skeptical public, Post-ABC poll finds|url=https://www.washingtonpost.com/news/wonk/wp/2017/11/03/republicans-tax-overhaul-pitch-faces-skeptical-public-post-abc-poll-finds/|newspaper=The Washington Post|access-date=December 8, 2017|date=November 3, 2017}}</ref> |- | Politico/Morning Consult | {{dts|link=off|October 26, 2017}} | {{dts|link=off|October 30, 2017}} | {{bartable|48|%|1|1em|background:green}} | {{bartable|37|%|1|1em|background:red}} | <ref>{{cite web|last1=Eckert|first1=Toby|title=Poll: Voters like tax reform overall but cool to corporate cut|url=https://www.politico.com/story/2017/11/01/voters-like-tax-reform-overall-but-cool-to-corporate-cut-244399|publisher=Politico|access-date=December 8, 2017|date=November 1, 2017}}</ref> |- | Reuters/Ipsos | {{dts|link=off|October 20, 2017}} | {{dts|link=off|October 23, 2017}} | {{bartable|28|%|1|1em|background:green}} | {{bartable|41|%|1|1em|background:red}} | <ref>{{cite news|last1=Becker|first1=Amanda|last2=Kahn|first2=Chris|title=Fewer than a third of Americans back Trump tax plan: Reuters/Ipsos poll|url=https://www.reuters.com/article/us-usa-tax-poll/fewer-than-a-third-of-americans-back-trump-tax-plan-reuters-ipsos-poll-idUSKBN1CT2TD|work=Reuters|access-date=December 8, 2017|date=October 24, 2017}}</ref> |- | CNN/SSRS | {{dts|link=off|October 12, 2017}} | {{dts|link=off|October 15, 2017}} | {{bartable|34|%|1|1em|background:green}} | {{bartable|52|%|1|1em|background:red}} | <ref>{{cite web|title=CNN October 2017|url=http://i2.cdn.turner.com/cnn/2017/images/10/18/rel10c.-.taxes.pdf|publisher=CNN|access-date=December 8, 2017|date=October 18, 2017}}</ref> |- | Politico/Morning Consult | {{dts|link=off|September 29, 2017}} | {{dts|link=off|October 1, 2017}} | {{bartable|48|%|1|1em|background:green}} | {{bartable|37|%|1|1em|background:red}} | <ref>{{cite web|last1=Shepard|first1=Steven|title=Poll: 48 percent approve of Trump's tax proposal|url=https://www.politico.com/story/2017/10/04/trump-tax-proposal-polling-243426|publisher=Politico|access-date=December 8, 2017|date=October 4, 2017}}</ref> |- | ABC/''The Washington Post'' | {{dts|link=off|September 18, 2017}} | {{dts|link=off|September 21, 2017}} | {{bartable|28|%|1|1em|background:green}} | {{bartable|44|%|1|1em|background:red}} | <ref>{{cite web|last1=Filer|first1=Christine|title=Two-thirds say large corporations pay too little in federal taxes (POLL)|url=https://abcnews.go.com/Politics/thirds-large-corporations-pay-federal-taxes-poll/story?id=50082215|work=ABC News|access-date=December 8, 2017|date=September 26, 2017}}</ref> |}
==Follow-on bills== [[File:2021-11-19 Nancy Pelosi BBBA.webm|thumb|House speaker Nancy Pelosi speech of November 2021 comparing the Build Back Better Act and the tax act of 2017]]
House Republicans have written follow-on bills that would extend the individual tax cuts beyond their current expiration date, simplify the rules for Individual Retirement Accounts, and add new tax deductions for small businesses.<ref>Kaeding, Nicole; York, Erica (July 24, 2018). "[https://taxfoundation.org/tax-reform-2-0-framework-good-start/ Tax Reform 2.0 Framework a Good Start]". Tax Foundation.</ref>
The follow-on bills were written as three separate bills, named the Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760), the Family Savings Act (H.R. 6757), and the American Innovation Act of 2018 (H.R. 6756).<ref>York, Erica (September 14, 2018). "[https://taxfoundation.org/ways-means-committee-passes-tax-reform-2-0/ The Ways and Means Committee Passes Tax Reform 2.0]". Tax Foundation.</ref>
On September 27, the House of Representatives passed the Family Savings Act by a vote of a 240–177, and then it passed the American Innovation Act by a vote of 260–156.<ref>"[https://www.congress.gov/bill/115th-congress/house-bill/6757?q=%7B%22search%22%3A%5B%22H.R.+6757%22%5D%7D&r=1 H.R.6757: Family Savings Act]". ''115th Congress''. Retrieved November 26, 2018.</ref><ref>"[https://www.congress.gov/bill/115th-congress/house-bill/6756?q=%7B%22search%22%3A%5B%22H.R.+6756%22%5D%7D&r=1 H.R.6756: American Innovation Act of 2018]". ''115th Congress''. Retrieved November 26, 2018.</ref><ref name=cutspermanent>Lorenzo, Aaron (September 28, 2018). "[https://www.politico.com/story/2018/09/28/house-tax-puts-permanent-817246 House votes to make individual tax cuts permanent]". ''Politico''.</ref>
On September 28, the House of Representatives passed the Protecting Family and Small Business Tax Cuts Act by a vote of 220–191.<ref name=cutspermanent/><ref>"[https://www.congress.gov/bill/115th-congress/house-bill/6760?q=%7B%22search%22%3A%5B%22H.R.+6760%22%5D%7D&r=1 H.R.6760: Protecting Family and Small Business Tax Cuts Act of 2018]". ''115th Congress''. Retrieved November 26, 2018.</ref> Several Republicans in the House voted against the bill to make permanent the $10,000 annual limit on federal tax deductions for state and local taxes because they represent states where residents tend to pay higher state and local taxes.<ref name=cutspermanent/>
The Build Back Better Act, in the version passed by the House in November 2021 (to be reconciled with the Senate),<ref>{{cite web|access-date=2021-11-21|title=House Democrats pass Biden's expansive Build Back Better policy plan|url=https://www.theguardian.com/us-news/2021/nov/19/house-democrats-pass-biden-expansive-build-back-better-policy-plan|date=2021-11-19|website=the Guardian}}</ref> repeals or partially reverses various provisions of the 2017 act, according to the summary given by House speaker Nancy Pelosi in her speech on the morning of passage.<ref>{{cite web|access-date=2021-11-21|title=Pelosi Hails 'Historic' Bill as House Poised to Pass Biden Plan|url=https://uk.news.yahoo.com/biden-bill-heads-friday-vote-104252532.html|author1=Erik Wasson |author2=Billy House |newspaper=Bloomberg News|date=2021-11-19}}</ref>
==Subsequent legal challenges of the Affordable Care Act== The zeroing out of the individual mandate through this Act resulted in several states filing legal challenges to the constitutionality of the entire ACA based on the Supreme Court's prior decision in ''National Federation of Independent Business v. Sebelius'' (2012), which justified the individual mandate as an allowable tax; these legal challenges were led by the state of Texas. In December 2018, Judge Reed O'Connor of the District Court of Northern Texas issued his opinion in agreement with the states that without the individual mandate, the whole of the ACA had no standing. California and several other states led the appeal of the case to the Fifth Circuit Court. The Fifth Circuit affirmed in part with O'Connor's opinion on the unconstitutionality of the ACA without the individual mandate in December 2019. The case was raised to the Supreme Court to be heard as ''California v. Texas'' during the court's 2020–21 term; in a 7–2 decision issued on June 17, 2021, the Court ruled that Texas and other states that initially challenged the individual mandate did not have standing, as they had not shown past or future injury related to the provision. The Supreme Court otherwise did not rule on the constitutionality of the individual mandate in this case.<ref>{{cite news | url = https://www.nytimes.com/2020/03/02/us/supreme-court-obamacare-appeal.html | title = Supreme Court to Hear Obamacare Appeal | first = Adam | last = Liptak | date = March 2, 2020 | access-date = March 2, 2020 | work = The New York Times}}</ref><ref>{{cite news|url=https://apnews.com/article/supreme-court-dismisses-obamacare-challenge-67cc2e9604a70b1b329c5f3b4177a688 |title=Supreme Court dismisses challenge to Obama health law|first = Mark | last= Sherman|date=June 17, 2021| access-date = June 17, 2021 | publisher = Associated Press}}</ref><ref>{{cite web | url = https://www.msnbc.com/rachel-maddow-show/affordable-care-act-survives-supreme-court-challenge-again-n1271151 | title = Affordable Care Act survives Supreme Court challenge (again) | first = Steve | last= Benen |author-link=Steve Benen | date = June 17, 2021 | access-date = June 17, 2021 | publisher = MSNBC }}</ref>
== Permanent extension == {{Main|One Big Beautiful Bill Act}} thumb|The 2025 One Big Beautiful Bill Act extended the 2017 cuts indefinitely.
In May 2024, the Congressional Budget Office estimated that extending the provisions expiring in 2025 would add $4.6 trillion in deficits over 10 years.<ref name=":16" />
In July 2024, the ''Associated Press'' cited leading economists who estimated it would add over $5 trillion to the debt.<ref>{{Cite web |last=Boak |first=Josh |date=2024-07-15 |title=Trump's economic plans include proposed tariffs, tax cuts and no taxes on tips. Details are scarce |url=https://apnews.com/article/trump-economy-tariffs-project-2025-biden-b7fb80fd689ed773da83c80e52559b4f |access-date=2024-08-26 |website=AP News |language=en}}</ref>
Economists across the political spectrum have expressed concern that an extension would boost inflationary pressures.<ref name=":13">{{Cite web |last=Jacobson |first=Louis |date=November 7, 2022 |title=GOP leaders are proposing tax cuts. Could that drive inflation? |url=https://www.politifact.com/article/2022/nov/07/gop-leaders-are-proposing-tax-cuts-could-drive-inf/ |access-date=2024-07-23 |website=PolitiFact |language=en-US |quote=However, key Republican leaders have said that if they regain power in Congress, one of their favored policy solutions will be to cut taxes, by permanently extending tax cuts signed by former President Donald Trump. Economists across the ideological spectrum have warned that would boost inflationary pressures.}}</ref><ref name=":14">{{Cite web |last=Levitz |first=Eric |date=2024-04-24 |title=Trump's team keeps promising to increase inflation |url=https://www.vox.com/2024-elections/24137666/trump-agenda-inflation-prices-dollar-devaluation-tariffs |access-date=2024-07-23 |website=Vox |language=en-US}}</ref>
''The Economist'' said extending the 2017 tax cuts would worsen America's dire fiscal trajectory, which would see growing inflation without significant tax increases or cuts to spending.<ref name=":15">{{Cite news |date=May 2, 2024 |title=America's reckless borrowing is a danger to its economy—and the world's |url=https://www.economist.com/leaders/2024/05/02/americas-reckless-borrowing-is-a-danger-to-its-economy-and-the-worlds |access-date=2024-07-23 |newspaper=The Economist |issn=0013-0613 |quote=The biggest economic decision facing the next president is how generously to renew Donald Trump’s tax cuts of 2017, a step that will only worsen America’s dire fiscal trajectory.}}</ref>
The Urban-Brookings Tax Policy Center estimated that the top 5% of earners would get 45% of the benefits if extended.<ref>{{Cite web |last=Luhby |first=Tami |date=2024-07-08 |title=Top 5% of taxpayers would get nearly half the benefit if Trump tax cuts are extended {{!}} CNN Politics |url=https://www.cnn.com/2024/07/08/politics/trump-tax-cuts-tcja-wealthy-benefit/index.html |access-date=2024-08-26 |website=CNN |language=en}}</ref>
During his 2024 campaign, Trump advocated for extending all of the tax cuts and adding additional cuts including on corporations, tips, and social security payments.<ref name=":17">{{Cite news |last1=Guggenheim |first1=Benjamin |last2=Becker |first2=Bernie |date=August 27, 2024 |title=Trump and Harris confront a trillion-dollar question over expiring tax cuts |url=https://www.politico.com/news/2024/08/27/trump-harris-tax-cuts-00175441 |access-date=May 21, 2025 |work=Politico}}</ref> In May 2025, during his presidency, the House Budget Committee approved a bill (the One Big Beautiful Bill Act) to do this.<ref>{{Cite web |last1=Kapur |first1=Sahil |last2=Wong |first2=Scott |last3=Stewart |first3=Kyle |last4=Asghar |first4=Syedah |date=2025-05-18 |title=Key House committee advances Trump agenda bill after appeasing conservatives |url=https://www.nbcnews.com/politics/congress/key-house-committee-advances-trump-agenda-bill-conservatives-rcna207555 |access-date=2025-05-21 |website=NBC News |language=en}}</ref> The legislation passed both houses of Congress, with Vice President JD Vance casting a tie-breaking vote in the Senate. On July 4, 2025, Trump signed the bill into law,<ref>{{Cite web |date=July 3, 2025 |title=Trump to sign bill on Friday at 5 p.m., White House says |url=https://www.reuters.com/world/us/trump-sign-bill-friday-5-pm-white-house-says-2025-07-03/ |access-date=July 4, 2025 |work=Reuters}}</ref> extending the personal tax cuts indefinitely.<ref name="signed_law">{{cite news |last1=Freking |first1=Kevin |last2=Mascaro |first2=Lisa |url=https://apnews.com/article/what-is-republican-trump-tax-bill-f65be44e1050431a601320197322551b |title=What's in the tax and spending bill that Trump has signed into law |work=AP News |date=July 5, 2025 |access-date=July 5, 2025}}</ref>
==See also== * Bush tax cuts * Reagan tax cuts * Revenue Act of 1964
== Explanatory notes == {{Reflist|group=nb}}
== References == {{Reflist|30em}}
==External links== {{Commons category}} * [https://www.govinfo.gov/link/plaw/115/public/97?link-type=uslm Tax Cuts and Jobs Act of 2017] ([https://www.govinfo.gov/content/pkg/PLAW-115publ97/pdf/PLAW-115publ97.pdf PDF]) as enacted in the US Statutes at Large * {{USBill|115|H.|1}} via Congress.gov * [https://taxfoundation.org/2018-tax-reform-calculator/ Tax Foundation's calculator to see effect of the law on you] {{Webarchive|url=https://web.archive.org/web/20190117121205/https://taxfoundation.org/2018-tax-reform-calculator/ |date=January 17, 2019 }} * [https://taxpayeradvocate.irs.gov/news/new-tax-reform-changes-website Taxpayer Advocate Service Tax Reform Changes Website] ({{Webarchive|url=https://web.archive.org/web/20201203072357/https://taxpayeradvocate.irs.gov/news/new-tax-reform-changes-website |date=December 3, 2020 }})
{{US tax acts}} {{First presidency of Donald Trump}} {{Paul Ryan}}
Category:2017 in American law Category:2017 in economic history Category:Acts of the 115th United States Congress Category:Articles containing video clips Category:First presidency of Donald Trump Category:Tax avoidance in the United States Category:United States federal reconciliation legislation Category:United States federal taxation legislation Category:Orrin Hatch