Tax Cuts and Jobs Act

Tax Cuts and Jobs Act

Long title	An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018
Acronyms (colloquial)	TCJA
Nicknames	Tax Cuts and Jobs Act GOP tax reform Trump tax cuts Cut Cut Cut Act[1]
Enacted by	the 115th United States Congress
Effective	January 1, 2018
Citations
Public law	115–97
Statutes at Large	131 Stat. 2054
Codification
Acts affected	Internal Revenue Code of 1986
Agencies affected	Internal Revenue Service
Legislative history
Introduced in the House as H.R. 1 by Kevin Brady (R–TX) on November 2, 2017 Committee consideration by House Committee on Ways and Means; passed committee on November 9, 2017, as "Tax Cuts and Jobs Act" (24–16) Passed the House on November 16, 2017 (227–205) Passed the Senate as the Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 on December 2, 2017 (51–49) Reported by the joint conference committee on December 15, 2017; agreed to by the Senate on December 20, 2017 (51–48) and by the House on December 19, 2017 and December 20, 2017 (227–203 224–201) Signed into law by President Donald Trump on December 22, 2017
United States Supreme Court cases
California v. Texas, No. 19-840, 593 U.S. ___ (2021) Moore v. United States, No. 22-800, 602 U.S. ___ (2024)

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The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,^[2] Pub. L. 115–97 (text) (PDF), is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act (TCJA),^[3][4] that amended the Internal Revenue Code of 1986. The legislation is commonly referred to in media as the Trump tax cuts. 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.^[5][6] The New York Times has described the TCJA as "the most sweeping tax overhaul in decades".^[7]

Most of the changes introduced by the bill went into effect on January 1, 2018, and did not affect 2017 taxes.^[8] 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, are scheduled to expire in 2025 while many of the business tax cuts expire in 2028.^[9][10] Extending the cuts have caused economists across the political spectrum to worry it would boost inflationary pressures^[11][12] and worsen America's fiscal trajectory.^[13] The Congressional Budget Office estimates that extending the expiring provisions would add $4.6 trillion in deficits over 10 years.^[14]

Studies show the TCJA increased the federal debt, as well as after-tax incomes disproportionately for the most affluent.^[15] 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.^[16]