In 2017, the United States passed the biggest business tax cut in its history, the Tax Cuts and Jobs Act (TCJA). Prior research shows that the law—which cut the top statutory tax rate on corporate income from 35 to 21 percent, allowed firms to write off equipment purchases immediately (rather than depreciating them more slowly), and introduced a new regime for taxing foreign source income—resulted in large corporate tax revenue losses.
In this paper, the authors further assess the corporate taxation aspects of the TCJA. Their working paper describes the nature of this historic policy shock, summarizes the state of knowledge on its costs and benefits, and discusses implications for the future of business tax policy in the United States. They also document the aggregate effects on investment, tax revenue, and GDP.
Keep scrolling to explore how the TCJA impacted investment, wages, output, and tax revenue.