Tax Cuts and Jobs Act

Tax Cuts and Jobs Act
Long titleAn Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018
Acronyms (colloquial)TCJA
NicknamesTax Cuts and Jobs Act
GOP tax reform
Trump tax cuts
Cut Cut Cut Act[1]
Enacted bythe 115th United States Congress
EffectiveJanuary 1, 2018
Citations
Public lawPub. L. 115–97 (text) (PDF)
Statutes at Large131 Stat. 2054
Codification
Acts affectedInternal Revenue Code of 1986
Agencies affectedInternal Revenue Service
Legislative history
  • Introduced in the House as H.R. 1 by Kevin Brady (RTX) on November 2, 2017
  • Committee consideration by House Committee on Ways and Means; passed committee on November 9, 2017, as "Tax Cuts and Jobs Act" (24–16)
  • Passed the House on November 16, 2017 (227–205)
  • Passed the Senate as the Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 on December 2, 2017 (51–49)
  • Reported by the joint conference committee on December 15, 2017; agreed to by the Senate on December 20, 2017 (51–48) and by the House on December 19, 2017 and December 20, 2017 (227–203 224–201)
  • Signed into law by President Donald Trump on December 22, 2017
Major amendments
One Big Beautiful Bill Act
United States Supreme Court cases
  • California v. Texas, No. 19-840, 593 U.S. ___ (2021)
  • Moore v. United States, No. 22-800, 602 U.S. ___ (2024)

The Tax Cuts and Jobs Act, Pub. L. 115–97 (text) (PDF), is a United States federal law that amended the Internal Revenue Code of 1986, and also known as the Trump Tax Cuts, but officially the law has no short title, with that being removed during the Senate amendment process.[2] The New York Times described the TCJA as "the most sweeping tax overhaul in decades".[3] Studies show the TCJA increased the federal debt, as well as after-tax incomes disproportionately for the most affluent.[4] It led to an estimated 11% increase in corporate investment, but its effects on economic growth and median wages were smaller than expected and modest at best.[5]

Major elements of the changes include reducing tax rates for corporations and individuals, increasing the standard deduction and family tax credits, eliminating personal exemptions and making it less beneficial to itemize deductions, limiting deductions for state and local income taxes and property taxes, further limiting the mortgage interest deduction, reducing the alternative minimum tax for individuals and eliminating it for corporations, doubling the estate tax exemption, and reducing the penalty for violating the individual mandate of the Affordable Care Act (ACA) to $0.[6][7]

Most of the changes introduced by the bill went into effect on January 1, 2018, and did not affect 2017 taxes.[8] Many tax cut provisions contained in the TCJA, notably including individual income tax cuts, such as the changes to the standard deduction in §63 of the IRC, were scheduled to expire in 2025 while many of the business tax cuts were set to expire in 2028.[9][10] However, in 2025, Congress passed the One Big Beautiful Bill Act, which extends most provisions of the TCJA beyond their original expiration dates.[11] Extending the cuts have caused economists across the political spectrum to worry it could boost inflationary pressures[12][13] and worsen America's fiscal trajectory.[14] The Congressional Budget Office estimated that extending the expiring provisions would add $4.6 trillion in deficits over 10 years.[15]

  1. ^ Graham, David A. (November 1, 2017). "The 'Cut Cut Cut Act' Is Effective Branding". The Atlantic.
  2. ^ Watkins, Eli. "Senate rules force Republicans to go with lengthy name for tax plan". CNN. Retrieved December 20, 2017.
  3. ^ Kaplan, Thomas (December 20, 2017). "House Gives Final Approval to Sweeping Tax Overhaul". The New York Times.
  4. ^ Gale, William G.; Hoopes, Jeffrey L.; Pomerleau, Kyle (2024). "Sweeping Changes and an Uncertain Legacy: The Tax Cuts and Jobs Act of 2017". Journal of Economic Perspectives. 38 (3): 3–32. doi:10.1257/jep.38.3.3. ISSN 0895-3309.
  5. ^ Chodorow-Reich, Gabriel; Zidar, Owen; Zwick, Eric (2024). "Lessons from the Biggest Business Tax Cut in US History". Journal of Economic Perspectives. 38 (3): 61–88. doi:10.1257/jep.38.3.61. ISSN 0895-3309.
  6. ^ "Reconciliation Recommendations of the Senate Committee on Finance". Congressional Budget Office. November 26, 2017. Retrieved July 9, 2018.
  7. ^ United States. Congress. Joint Committee on Taxation (2018). General Explanation of Public Law 115-97. Washington, D.C.: U.S. Government Publishing Office. Retrieved December 19, 2018.
  8. ^ Pullen, John Patrick (December 20, 2017). "Here's When the GOP Tax Reform Bill Will Take Effect". Fortune. Retrieved December 23, 2017.
  9. ^ Luhby, Tami (June 13, 2024). "$3.4 trillion in individual tax cuts are expiring next year. Biden and Trump would handle it very differently". CNN. Retrieved August 26, 2024.
  10. ^ Wire, Sarah D. (August 25, 2024). "Harris or Trump will be busy in 2025: Next president will face these issues in office". USA TODAY. Retrieved August 26, 2024.
  11. ^ Sangal, Deva Lee, Leinz Vales, Maureen Chowdhury, Shania Shelton, Aditi (July 3, 2025). "Live updates: House votes on Trump's 'big, beautiful bill' | CNN Politics". CNN. Retrieved July 3, 2025.{{cite web}}: CS1 maint: multiple names: authors list (link)
  12. ^ Cite error: The named reference :13 was invoked but never defined (see the help page).
  13. ^ Cite error: The named reference :14 was invoked but never defined (see the help page).
  14. ^ Cite error: The named reference :15 was invoked but never defined (see the help page).
  15. ^ Bogage, Jacob (June 24, 2024). "The national debt is ballooning. The next president probably won't stop it". Washington Post.