The 2017 Trump Tax Cuts, known as the Tax Cuts and Jobs Act (TCJA), reduced average tax burdens for taxpayers across the income spectrum and temporarily simplified the tax filing process through structural reforms. It also boosted capital investment by reforming the corporate tax system and significantly improved the international tax system.
At the end of 2025, the individual portions of the Tax Cuts and Jobs Act expire all at once. Without congressional action, 62 percent of filers could soon face a tax increase relative to current policy in 2026. At the same time, the price tag for extending the 2017 Trump tax cuts is in the trillions.
Explore our related resources below, including our tariff tracker, our budget reconciliation tracker, our latest analysis and reform options regarding TCJA permanence, our interactive tax calculator and congressional districts map, and how 2026 brackets would change if the TCJA expires.
President Trump has called for permanent extension of the 2017 tax cuts, additional policies including no taxes on tips, overtime pay, and Social Security benefits for retirees, and has also promised higher taxes on US imports through a series of new tariffs.
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Permanently extending the Tax Cuts and Jobs Act would boost long-run economic output by 1.1 percent, the capital stock by 0.7 percent, wages by 0.5 percent, and hours worked by 847,000 full-time equivalent jobs.
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Unless Congress acts, Americans are in for a tax hike in 2026.
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At the end of 2025, the individual tax provisions in the Tax Cuts and Jobs Act (TCJA) expire all at once. Without congressional action, most taxpayers will see a notable tax increase relative to current policy in 2026.
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Policymakers should have two priorities in the upcoming economic policy debates: a larger economy and fiscal responsibility. Principled, pro-growth tax policy can help accomplish both.
21 min read
If Congress allows the Tax Cuts and Jobs Act (TCJA) to expire as scheduled, most aspects of the individual income tax would undergo substantial changes, resulting in more than 62 percent of tax filers experiencing tax increases in 2026.
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Lawmakers should see 2025 as an opportunity to consider more fundamental tax reforms. While the TCJA addressed some of the deficiencies of the tax code, it by no means addressed them all.
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Given that U.S. debt is roughly the size of our annual economic output, policymakers will face many tough fiscal choices in the coming years. The good news is there are policies that both support a larger economy and avoid adding to the debt.
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While federal tax collections—especially corporate taxes—have reached historically high levels, these gains have not kept pace with escalating spending, particularly on debt interest, leading to a substantial and concerning budget deficit in FY24.
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The TCJA improved the U.S. tax code, but the meandering voyage of its passing and the compromises made to get it into law show the challenges of the legislative process.
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The Tax Cuts and Jobs Act’s changes to family tax policy serve as a reminder to avoid looking at tax reform provisions in a vacuum.
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The Tax Cuts and Jobs Act (TCJA) significantly lowered the effective tax rates on business income, but the impact was not the same for C corporations and pass-through businesses.
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As lawmakers consider which policies to prioritize in the upcoming tax policy debates, better cost recovery for all investment should be top of mind.
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Pro-growth tax reform that does not add to the deficit will require tough choices, but whether to raise the corporate tax rate is not one of them. If lawmakers want to craft fiscally responsible and pro-growth tax reform, a higher corporate tax rate simply does not fit into the puzzle.
3 min read
The 2017 Tax Cuts and Jobs Act (TCJA) was the largest corporate tax reform in a generation, lowering the corporate tax rate from 35 percent to 21 percent, temporarily allowing full expensing for short-lived assets (referred to as bonus depreciation), and overhauling the international tax code.
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As members of Congress prepare to address the expiration of the TCJA, they should appreciate how revenues have evolved since 2017.
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While the approaches differ, they share a reliance on similar linkages: new capital investment drives productivity growth, which grows the economy and raises wages for workers.
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The Tax Cuts and Jobs Act of 2017 (TCJA) reformed the U.S. system for taxing international corporate income. Understanding the impact of TCJA’s international provisions thus far can help lawmakers consider how to approach international tax policy in the coming years.
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Making 100 percent bonus depreciation permanent avoids the uncertainty associated with the phaseout of a powerful pro-growth policy and would provide a cost-effective boost to long-run economic output, wages, and employment in the United States.
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Full expensing, if made permanent, would be one of the most cost-effective ways to increase growth as it would produce about 4.5 times more GDP growth per dollar of revenue than making the law’s individual tax provisions permanent, according to our analysis.
3 min readEven two years after enactment of the federal Tax Cuts and Jobs Act (TCJA), many states have yet to issue guidance explaining how they conform to key provisions of the law, particularly those pertaining to international income.
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Treasury released final regulations on the base erosion and anti-abuse tax (BEAT), which is meant to dissuade firms from engaging in profit shifting abroad. Other high-profile releases from 2019 include final regulations guiding enforcement of Section 199A, commonly known as the pass-through deduction; final regulations on enforcing the new tax on global intangible low-tax income (GILTI); and final regulations on state-level workarounds to the $10,000 limit on the state and local tax deduction (SALT).
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Initial 2018 IRS tax return data shows that the TCJA expanded the use of several credits and deductions, made the standard deduction more favorable than itemizing, reduced tax refunds, and lowered taxes for most Americans.
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Our paper undertakes a review of controlled foreign corporation (CFC) rules around the world as a contribution to the global discussion over the possible expansion of existing anti-base erosion CFC regimes or the potential adoption of a minimum tax.
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Who are the workers, consumers, and shareholders who interact with businesses in the U.S.? What forms do these businesses take? How do business taxes impact people’s lives? It is essential we answer these questions in order to design a business tax system that is simple, efficient, and enables economic progress.
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The debate in Washington, D.C. often centers around tax expenditures, so-called corporate loopholes, in the tax code. But not all tax expenditures are created equal. Some represent neutral tax treatment and should be left alone, while others are distortionary and should be repealed. Understanding what a tax expenditure represents is essential for understanding how our tax code works for both businesses and individuals.
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While tax rates matter to businesses, so too does the measure of income to which those tax rates apply. The corporate income tax is a tax on profits, normally defined as revenue minus costs. However, under the current tax code, businesses are unable to deduct the full cost of certain expenses—their capital investments—meaning the tax code is not neutral and actually increases the cost of investment.
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