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Final Passage of the Tax Cuts and Jobs Act

The Tax Foundation has done yeoman's work in keeping American's informed about Tax Cuts and Jobs Act over the past several months -- you can follow that progress at their Tax Policy Blog.

With the final vote today in the House of Representatives, the Tax Foundation president, Scott Hodge, released the statement below:

"Congress today took a historic step toward rewriting the U.S. tax code for the first time since 1986. Our Taxes and Growth model shows that this legislation over the next decade will boost GDP by 1.7 percent and wages by 1.5 percent, while creating 339,000 additional jobs.

"For far too long, the U.S. has lagged behind its trading partners with an extremely high corporate tax rate and a worldwide tax system. Now the U.S. will have a much more competitive corporate rate at 21 percent, as well as a territorial tax system that only taxes businesses on income earned domestically. Businesses no longer will be discouraged from reinvesting their profits in America.

"Admittedly, the bill isn’t perfect and represents a balance among political compromises, fiscal constraints, and pro-growth policies. The special tax treatment of pass-through businesses could lead to costly, time-consuming tax planning opportunities and disputes. Full expensing—potentially the most pro-growth tax policy lawmakers could adopt—is only made temporary, which means the growth effects will be somewhat muted. And shifting to a territorial tax system, while important, will involve difficult decisions about base erosion rules that will require careful analysis to prevent any unintended consequences.

"Nevertheless, it is encouraging to see Congress work through the very difficult, challenging process of reforming the tax code and producing an end product that makes important progress. We at the Tax Foundation have worked hard to educate federal and state lawmakers about the trade-offs involved and will continue to do so throughout implementation of the bill."

Hodge's statement includes links to additional information.

The National Taxpayers Union issued press releases comment both the House of Representatives and the Senate on passing the Tax Cuts and Jobs Act (TCJA -- here and here, respectively.  Also at their blog, Demian Brady also provides a summary of his USA Today op-ed in which he describes how TCJA "will simplify the Code."

At the NTUF blog, Andrew Moylan cites calculations that TCJA passage "will save taxpayers 210 million hours and $13 billion in compliance costs. Because 30 million people will no longer have to endure the frustration of itemizing, they can reclaim the time and out-of-pocket expenses they used to suffer at the hands of the tax code."

The Council for Citizens Against Government Waste also cheered final passage of tax reform, applauding the House and Senate for passing the Tax Cuts and Jobs Act. The noted, "It is the bast holiday gift possible from the federal government."

Congress.gov provides a link to H.R. including links to the House and Conference reports, the CBO cost estimates, and the 28 roll call votes. Fox News provides a summary analysis of TCJA here. Two days ago, the Tax Foundation provided "preliminary details and analysis" of TCJA. Finally, the Tax Policy Center's analysis can be found here.

If you are pleased with passage of the Tax Cuts and Jobs Act, take a couple of minutes to write to your members of Congress. Our friends at the National Taxpayers Union provides a form here to thank your representatives in Congress. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Be sure to ask for a written response. And tell them ACTA sent you.

UPDATE (12/21/17): At the Washington Free Beacon, Ali Meyer provides two articles.  The first is an analysis of families that will receive tax cuts under TCJA, while the second article is on final passage. At the Washington Examiner today, Tim Carney says that people are opposing "this tax cut because they've been told it's a tax hike . . .  This may surprise you if you rely on major media outlets for your news." The Heritage Foundation's Adam Michel analyzed the 2017 TCJA, on Tuesday.

At Cato's blog, Cato@Liberty, Chris Edwards explains the biggest tax cuts from TCJA are for the middle class, writing:

"Republicans have enacted the Tax Cuts and Jobs Act, the largest tax overhaul since 1986. While many people seem to think that the legislation favors the rich, it actually delivers the largest relative tax cuts to the middle class. That is clear if you dig beneath the surface of estimates from the liberal Tax Policy Center (TPC).

"TPC’s new analysis shows tax changes for the final GOP bill for households by income quintile (or fifth). But the data is not presented in a neutral context to understand the relative sizes of tax cuts for each group. I present TPC data in context in the table below."

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