Several weeks ago, we projected the number of new jobs each state can expect in 2018, due to the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Cuts and Jobs Act. Using our Taxes and Growth model, we’ve expanded the analysis to cover the entire federal budget window.
As we’ve written previously, the Tax Cuts and Jobs Act will increase long-run GDP, raise wages, and create jobs.
These predictions show the cumulative job effect of the Tax Cuts and Jobs Act by year. From 2018 to 2025, the country should expect to see growth in full-time equivalent (FTE) jobs. By 2025, the nation, as a whole, would expect 1.44 million new jobs. However, due to the expiration of many provisions in that year, the cumulative FTE jobs figure starts to decline, falling to 1.22 million new full-time equivalent jobs in 2027.
Eventually, the TCJA will results in an increase of 339,000 jobs in the long run. Those results reflect the ultimate effect of the tax plan after all the economic effects phase in and the individual provisions phase out. However, as we’ve noted elsewhere, making the individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. provisions permanent would reverse this trend, resulting in an increase of jobs in the long run.
The table below shows the annual estimated impact the TCJA will have on full-time equivalent jobs over the next decade.
| Numbers in Thousands | |
|---|---|
| Year | United States Total |
| 2018 | 215 |
| 2019 | 464 |
| 2020 | 706 |
| 2021 | 917 |
| 2022 | 1,070 |
| 2023 | 1,223 |
| 2024 | 1,351 |
| 2025 | 1,443 |
| 2026 | 1,348 |
| 2027 | 1,216 |
Additionally, we’ve broken up these estimates for each state, showing their cumulative jobs added by year. Indiana, for instance, should expect to see 14,871 new jobs in 2020, 25,762 by 2023, and 30,396 in 2025. Similar to the nation as a whole, Indiana would see a decline in cumulative jobs in 2026 and 2027, falling to a net total of 25,614 in 2027.
You can also use our new interactive map tool to better visualize the updated data by state here.
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