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The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity.
In December 2017, the Tax Cuts and Jobs Act was signed into law, representing the most significant tax code overhaul in over three decades. Since then, the Tax Foundation has published a number of valuable resources to help you understand what the Tax Cuts and Jobs Act changed and how exactly your wallet, your state, and the U.S. economy will be impacted. Explore the resources below to see how tax reform will impact you.
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Setting aside the debate over whether a low tax bill is fair, what is missed in such stories is that American businesses are critical to the tax collection system at every level of government—federal, state, and local. Businesses either pay or remit more than 93 percent of all the taxes collected by governments in the U.S. Without businesses as their taxpayers and tax collectors, American governments would not have the resources to provide even the most basic services.
Why do some companies appear to be profitable but pay little or no federal income taxes? It’s largely due to differences between book and taxable income.
One of the most significant provisions in the Tax Cuts and Jobs Act was the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent. Over time, the lower corporate rate will encourage new investment and lead to additional economic growth. It will make the U.S. more attractive for companies by increasing after-tax returns on investments and will discourage companies from shifting profits to low-tax jurisdictions.
Research suggests place-based incentive programs redistribute rather than generate new economic activity, subsidize investments that would have occurred anyway, and displace low-income residents.
The Tax Cuts and Jobs Act simplified tax filings via an expanded standard deduction, but currently, these individual tax changes are to expire after 2025.
Full expensing is a key driver of future economic growth, and can have a larger pro-growth effect per dollar of revenue forgone than cutting tax rates.
This interactive tool breaks down America's top 1,000 investment funds to show who benefits from stock buybacks triggered by the Tax Cuts and Jobs Act.
Stock buybacks are readily visible, and unfortunately some have misunderstood stock buybacks to be taking place at the expense of long-term investments.
Tax Foundation President, Scott Hodge, provides written testimony before the United States Joint Economic Committee on the economic growth effects of TCJA.
In the long run, permanent full expensing produces about 4.5 times more GDP growth per dollar of revenue than making individual TCJA provisions permanent.
The Tax Cuts and Jobs Act made significant progress in improving businesses’ ability to recover the cost of making investments in the United States by enacting 100 percent bonus depreciation.
Raising the corporate tax rate would reduce economic growth and lead to a smaller capital stock, lower wage growth, and reduced employment.
Tax compliance creates real costs, which can be calculated. Each method provides unique illustrations of the cost of complying with U.S. tax code.
The increase in stock buybacks isn’t surprising nor a sign that the Tax Cuts and Jobs Act won’t increase domestic investment.
Cutting the corporate tax rate improves the United States' international tax competitiveness, incentives new investment and benefits both old & new capital.
Virginia has an opportunity to improve its tax competitiveness following the Tax Cuts and Jobs Act. Inaction will result in higher taxes.
The Tax Cuts and Jobs Act reduced the corporate income tax rate from the highest statutory rate in the developed world to a more globally competitive 21 percent.
Stock buybacks are a clearly visible phenomenon, but most critics point out the initial action, the buyback, and ignore the greater context.
The newly expanded standard deduction will reduce the time taxpayers spend working on Form 1040 by 4 to 7 percent, translating into $3.1 to $5.4 billion saved annually.
The Tax Cuts and Jobs Act (TCJA) is projected to add 215,000 full-time equivalent jobs in 2018 alone, and 1,443,000 cumulative full-time equivalent jobs by 2025. Our new interactive maps shows how many new jobs each state can expect to see each year over the next decade.
Georgia, Idaho, Iowa, Missouri, and Utah capitalized upon the Tax Cuts and Jobs Act's (TCJA) changes by conforming to increase their annual state revenues.
In contrast, the Tax Cuts and Jobs Act lowered the corporate tax rate and allows immediate and full expensing for the next five years.
If extended, the individual income tax provisions in the Tax Cuts and Jobs Act would increase long-run GDP by 2.2 percent, long-run wages by 0.9 percent, and add 1.5 million new jobs.
Taxpayers in every income level will receive a tax cut in 2018 and for most of the next decade. See how the size of that tax cut will vary for each income group over the next decade with our new, long-term distributional analysis.
Here's how the new pass-through deduction works and how it can be reformed to be less complex, less prone to abuse, more neutral, and more economically efficient.
Stock buybacks transfer capital from old established firms to new and innovative ones that need capital to meet their potential.
The Organisation for Economic Co-operation and Development (OECD) praised a measure in the Tax Cuts and Jobs Act (TCJA) passed last December.
Retail groups sent a letter to Congress explaining that the “retail glitch" in the Tax Cuts and Jobs Act would discourage business investment.
How will the Tax Cuts and Jobs Act impact taxpayers in your congressional district? This interactive map compares average 2018 tax cuts across the country.
Due to a legislative oversight, the Tax Cuts and Jobs Act excluded the category of qualified improvement property investment from 100 percent bonus depreciation.
One hundred percent expensing for short-life business investments was a great start but needs to be enacted on a permanent basis for it to have an impact on long-term decision-making.
Indiana recently passed tax conformity legislation linking the state's individual and corporate tax code to the new federal law.
A closer look at the data shows that the amount of stock buybacks following the enactment of the Tax Cuts and Jobs Act isn't out of the norm.
The new federal tax law left states with some important decisions to make. If they delay, their residents could face confusion come filing time.
Iowa Gov. Kim Reynolds is on the verge of signing tax reform legislation that would greatly improve the state's needlessly complex tax code.
Stock buybacks made since the enactment of the Tax Cuts and Jobs Act doesn't mean that workers won't ultimately benefit through higher wages.
In response to the new federal tax law, the governor and lawmakers in both houses have proposed plans for updating Minnesota's tax code.
The Tax Cuts and Jobs Act moved the U.S. toward more of a territorial corporate tax system used by most other OECD countries. However, the U.S. law contains key differences in the treatment of foreign profits.
Several S&P 500 companies reported an increase in capital expenditures, a possible sign that the Tax Cuts and Jobs Act will help encourage new investment.
The Tax Cuts and Jobs Act improved the US tax code, but key provisions are only temporary. Now Congress may vote to ensure those tax breaks are permanent.
The Tax Cuts and Jobs Act was meant to boost growth and deter corporate inversions. What does it mean that an Ohio company is still moving its HQ to the UK?
Expiring provisions, scheduled tax increases on investment, unresolved issues in the code—The Tax Cuts and Jobs Act was passed, but tax reform isn't done yet.
In the wake of the Tax Cuts and Jobs Act, Maine is considering conformity legislation that would improve the competitiveness of the state's tax code.
In response to federal tax reform, Georgia is poised to reform its own tax code in a way that would make the state more competitive with its neighbors.
Federal tax reform will have a significant effect on state budgets. This resource, updated often, helps you keep track of the revenue impact in each state.
The time and effort associated with tax compliance is a drag on the economy, as researchers have shown. Will the Tax Cuts and Jobs Act reduce that burden?
The Tax Cuts and Jobs Act significantly reduced the federal statutory corporate income tax rate. When combined with state and local taxes, it put the U.S.’s corporate tax rate in line with the average among OECD nations.
The Tax Cuts and Jobs Act tax preference for farm co-ops would distort agricultural activity and create tax planning opportunities for wealthy taxpayers.
The TCJA is projected to improve the United States’ current ranking from 30th among the 35 Organisation for Economic Co-operation and Development (OECD) countries to 25th, an improvement of five places.
Our tax calculator allows you to compare how the Tax Cuts and Jobs Act and proposals to modify the federal tax code could impact overall tax burdens, take-home pay, credits, deductions, and more.
The tax bill will boost investment and incomes in the United States, and make the country a better place to locate production and hiring. There will be a transitory rise in the trade deficit, but in the context of a stronger, faster-growing economy.
Whether your state's corporate income tax code conforms to the federal corporate income tax code matters a great deal for how the Tax Cuts and Jobs Act will impact revenue in your state.
For policymakers in most states, the fact that the pass-through deduction doesn’t affect AGI should come as a relief. For those in the six states which use federal taxable income as their starting point for conformity, decoupling from the provision is an entirely viable option.
How would the Tax Cuts and Jobs Act impact different households? Check out our sample taxpayers to see what would change if the bill is enacted.
According to the Tax Foundation’s Taxes and Growth Model, the Tax Cuts and Jobs Act would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, an additional 339,000 full-time equivalent jobs, and cost $1.47 trillion on a static basis and by $448 billion on a dynamic basis.