- More than 80 percent of Americans will see their taxes lowered
- Drafters of the tax bill hope to unleash investment and economic growth, leading to more jobs and higher wages
- Out-of-control federal spending could make these benefits short-lived, however
On December 22, 2017, President Donald Trump enacted the most significant changes to the United States tax code in more than three decades by signing the Tax Cuts and Jobs Act (TCJA) into law.
Beginning in 2018, the new corporate tax rate will be 21 percent, down from an internationally high 35 percent; noncorporate and “pass-through” businesses (mostly small firms whose profit or loss is reported as personal income by their owners) will receive a new 20 percent deduction. The bill also allows temporary full expensing and moves toward a territorial tax system. The final bill represents a serious effort to reform a complex and badly broken system.