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.
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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.
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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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Although the U.S. has a progressive tax system and a relatively low tax burden compared to the OECD average, average-wage workers still pay more than 30 percent of their wages in taxes.
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According to our analysis, President Biden’s budget would reduce long-run economic output by about 1.3 percent and eliminate 335,000 FTE jobs. See what tax policies the president is proposing.
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President Biden’s new budget proposal outlines several major tax increases targeted at businesses and high-income individuals that would bring U.S. income tax rates far out of step with international norms.
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Immediately balancing the $20 trillion budget shortfall would take drastic, unwanted policy changes. Instead, lawmakers should target a more achievable goal, such as stabilizing debt and deficits with an eye toward comprehensive tax reform that can produce sufficient revenue with minimal economic harm.
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A new tax expenditures report by the Joint Committee on Taxation (JCT) reveals two problematic developments: 1) policymakers have increasingly relied on the tax code to deliver benefits to individuals, and 2) the broad, neutral tax treatment of investment has shifted to targeted subsidies for businesses.
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Forty-three states adopted tax relief in 2021 or 2022—often in both years—and of those, 21 cut state income tax rates. It’s been a remarkable trend, driven by robust state revenues and an increasingly competitive tax environment.
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Newly published data from the CBO indicates in 2019, before the onset of the pandemic, American incomes continued to rise as part of a broad economic expansion. It also shows that, contrary to common perceptions, the federal tax system is progressive.
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If bonus depreciation is allowed to phase out, then the tax bias against capital investments will increase, discouraging firms from making otherwise profitable investments.
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Over the long run, tax policies that grow after-tax incomes and the economy do more to boost charitable giving than policies that try to incentivize people to be charitable.
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Lawmakers should recognize both the growing importance of business R&D and the need to support it through a commonsense tax policy, namely a return to full and immediate expensing for R&D.
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While there is disagreement about the amount of interest that should be deductible, it’s clear that the limit based on EBIT makes the U.S. an outlier compared to other countries across the OECD while raising the cost of new investment.
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Two weeks after the 2022 midterm elections, it’s becoming clearer where tax policy may be headed for the rest of the year and into 2023. In the short term, Congress must deal with tax extenders and expiring business tax provisions that may undermine the economy.
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The 2022 midterm elections are wrapping up, and taxpayers are looking at a divided Congress for the next two years. Senior Policy Analyst Garrett Watson sits down with Jesse to give a quick analysis of what these elections mean for tax policy.
Policymakers face a difficult balancing act this year in what is likely to be an unusual tax extenders season.
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As we near this year’s “lame duck” session of Congress, there has been renewed interest in reforming the child tax credit as part of a tax deal. Our new analysis highlights the trade-offs that policymakers will face
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The business tax changes originally introduced in the TCJA are scheduled to increase tax burdens on businesses at a time when economic headwinds and broader uncertainty are higher than they have been in decades.
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We find that the dynamic cost of permanent bonus depreciation rises by about 7 percent under 4 percent inflation, but the economic benefit, measured by the size of the economy, rises by about 25 percent.
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Taxing university endowments has gained popularity recently, partly in response to the Biden administration’s forgiveness of student loan debt. Some view it as a means of holding universities accountable for the product they’re selling. Others view it as a tool to tamp down tuition rates or punish ideological opponents. But do these arguments hold water and is an endowment tax sound policy?
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