Tax Cuts and Jobs Act of 2017

Plan elements

Individual income tax

Under the law, there were numerous changes to the individual income tax, including changing the income level of individual tax brackets, lowering tax rates, and increasing the standard deductions and family tax credits while itemized deductions are reduced and the personal exemptions are eliminated.

Most individual income taxes are reduced, until 2025. The number of income tax brackets remain at seven, but the income ranges in several brackets have been changed and most brackets have lower rates. These are marginal rates that apply to income in the indicated range as under current law (i.e., prior Public Law 115-97 or the Act), so a higher income taxpayer will have income taxed at several different rates. A different inflation measure (Chained CPI or C-CPI) will be applied to the brackets instead of the Consumer Price Index (CPI), so the brackets increase more slowly. This is effectively a tax increase over time, as people move more quickly into higher brackets as their income rises; this element is permanent.

The standard deduction nearly doubles for married couples, from $12,700 to $24,000. For single filers, the standard deduction will increase from $6,350 to $12,000. About 70% of families choose the standard deduction rather than itemized deductions; this could rise to over 84% if doubled. The personal exemption is eliminated—this was a deduction of $4,050 per taxpayer and dependent, unless it is in an estate or trust.

The child tax credit (CTC) is doubled from $1,000 to $2,000, $1,400 of which will be refundable. There is also a $500 credit for other dependents, versus zero under current law. The lower threshold for the high-income phaseout for the CTC changes from $110,000 AGI to $400,000 for married filers.

Mortgage interest deduction for newly purchased homes (and second homes) was lowered from total loan balances of $1 million under current law to $750,000. Interest from home equity loans (aka second mortgages) is no longer deductible, unless the money is used for home improvements.

The deduction for state and local income tax, sales tax, and property taxes ("SALT deduction") will be capped at $10,000. This has more impact on taxpayers with more expensive property, generally those who live in higher-income areas, or people in states with higher rates for state tax.

Estate tax

For deaths occurring between 2018 and 2025, estates that exceed $11.2 million are subject to a 40% estate tax at time of death, increased from $5.6 million previously. For a married couple aggregating their exemptions, an estate exceeding $22.4 million is subject to a 40% estate tax at time of death.

Corporate tax

The corporate tax rate was changed from a tiered tax rate ranging from 15% to as high as 39% depending on taxable income to a flat 21%, while some related business deductions and credits were reduced or eliminated. The Act also changed the U.S. from a global to a territorial tax system with respect to corporate income tax. Instead of a corporation paying the U.S. tax rate for income earned in any country (less a credit for taxes paid to that country), each subsidiary pays the tax rate of the country in which it is legally established. In other words, under a territorial tax system, the corporation saves the difference between the generally higher U.S. tax rate and the lower rate of the country in which the subsidiary is legally established. Bloomberg journalist Matt Levine explained the concept, "If we're incorporated in the U.S. [under the old global tax regime], we'll pay 35 percent taxes on our income in the U.S. and Canada and Mexico and Ireland and Bermuda and the Cayman Islands, but if we're incorporated in Canada [under a territorial tax regime, proposed by the Act], we'll pay 35 percent on our income in the U.S. but 15 percent in Canada and 30 percent in Mexico and 12.5 percent in Ireland and zero percent in Bermuda and zero percent in the Cayman Islands." In theory, the law would reduce the incentive for tax inversion, which is used today to obtain the benefits of a territorial tax system by moving U.S. corporate headquarters to other countries.

One-time repatriation tax of profits in overseas subsidiaries is taxed at 8%, 15.5% for cash. U.S. multinationals have accumulated nearly $3 trillion offshore, much of it subsidiaries in tax-haven countries. The Act may encourage companies to bring the money back to the U.S. at these much lower rates.

The Corporate Alternative Minimum Tax was eliminated.

The law also eliminated the net operating loss carryback, a procedure by which a company with significant losses could receive a tax refund by counting the losses as part of the previous year's tax return. They were considered important in providing liquidity during a recession. The provision was cut in order to finance the tax cuts in the act, and was one of the largest offsets in the law.

Additionally, the domestic production activities deduction was eliminated by the Tax Cuts and Jobs Act.

Churches and nonprofit organizations

There is a 25% excise tax on compensation paid to certain employees of churches and other tax-exempt organizations. The excise tax applies to any organization that is tax-exempt under 501(c) or 501(d), a Section 521(b)(1) farmer's cooperative, Section 527 political organizations, and organizations that have Section 115(1) income that is earned by performing essential government functions.

The excise tax applies to compensation paid to certain employees in excess of $1,000,000 during the year. The employees covered under this rule are the organization's five highest-compensated employees and any employees who previously had this status after 2016. Compensation is exempt from the excise tax if the compensation is paid to medical doctors, dentists, veterinarians, nurse practitioners, and other licensed professionals providing medical or veterinary services. Compensation includes all current compensation, qualifying deferred compensation, non-qualifying deferred compensation without substantial risk of forfeiture, income under Section 457(f), and severance payments, but excluding Roth retirement contributions.

An organization may also be subject to the 21% excise tax if an organization has a deferred compensation plan in which benefits are spread over several years and then vest all at once. Severance payments exceeding triple an employee's average salary during the last five years may also be subject to the 21% excise tax.

There is a 1.4% excise tax on investment income of certain private tax-exempt colleges and universities. The excise tax applies only if the institution has at least 500 tuition-paying students and more than half the students are located in the United States. The excise tax applies if the institution and its related organizations have an endowment with an aggregate fair-market value at the end of the preceding tax year of at least $500,000 per full-time student, excluding assets used directly in carrying out institution's tax-exempt purpose.

This provision has been referred to as an endowment tax, and it has been estimated that it applies to around 32 universities.

Some provisions from the earlier House bill were dropped that would have taxed graduate student tuition waivers, tuition benefits for children and spouses of employees, and student loan interest. A Senate Parliamentarian ruling on December 19 changed the exemption threshold from 500 tuition-paying students to 500 total students. Endowment funds used to carry out a college's tax-exempt purpose are excluded from the asset threshold, but Internal Revenue Service has not issued regulations specifically defining this term.

Miscellaneous tax provisions

The Act contains a variety of miscellaneous tax provisions, many advantaging particular special interests. Miscellaneous provisions include:

Internal Revenue Code section 1031, which allowed the deferment of capital gains taxes on so-called "like-kind exchanges" of a wide array of real, personal, and business property, was maintained for real property but repealed for other types of property.

A tax break for citrus growers, allowing them to deduct the cost of replanting "citrus plants lost or damaged due to causes like freezing, natural disaster or disease."

The extension of "full expensing," a favorable tax treatment provision for film and television production companies, to 2022. The provision allows such companies "to write-off the full cost of their investments in the first year." The Joint Committee on Taxation estimates that the extension will lead to the loss of about $1 billion in federal revenue per year.

A provision ending a corporate tax exemption for certain international airlines with commercial flights to the United States (specifically, in cases where "the country where the foreign airline is headquartered doesn't have a tax treaty with the U.S., and if major U.S. airliners make fewer than two weekly trips to that foreign country"). This provision is seen as likely to disadvantage Gulf airlines (such as Etihad, Emirates and Qatar Airways); major U.S. airlines have complained that the Gulf states provide unfair subsidies to those carriers.

Reductions in excise taxes on alcohol for a two-year period. The Senate bill would reduce the tax on "the first 60,000 barrels of beer produced domestically by small brewers" from $7 to $3.50 and would reduce the tax on the first 6 million barrels produced from $18 to $16 per barrel. The Senate bill would also extend a tax credit on wine production to all wineries and would extend the credit to the producers and importers of sparkling wine as well. These provisions were supported by the alcohol lobby, specifically the Beer Institute, Wine Institute, and Distilled Spirits Council.

Exempts private jet management companies from the 7.5% federal excise tax that is levied on tickets for commercial flights.

Arctic National Wildlife Refuge drilling

The Act contains provisions that would open 1.5 million acres (6,100 km2) in the Arctic National Wildlife Refuge to oil and gas drilling. This major push to include this provision in the tax bill came from Republican Senator Lisa Murkowski. The move is part of the long-running Arctic Refuge drilling controversy; Republicans had attempted to allow drilling in ANWR almost 50 times. Opening the Arctic Refuge to drilling "unleashed a torrent of opposition from conservationists and scientists." Democrats and environmentalist groups such as the Wilderness Society criticized the Republican effort.

Legislative history

The bill was introduced in the House of Representatives on November 2, 2017, by Congressman Kevin Brady (R-Texas). On November 9, 2017, the House Ways and Means Committee passed the bill on a party-line vote, advancing the bill to the House floor. The House passed the bill on November 16, 2017, on a mostly-party line vote of 227–205. No Democrat voted for the bill, while 13 Republicans voted against it. On the same day, companion legislation passed the Senate Finance Committee, again on a party-line vote, 14–12. On November 28, the legislation passed the Senate Budget Committee, again on a party-line vote. In the early morning hours of December 2, 2017, the Senate passed its version of the bill by a 51–49 vote. Bob Corker (R–Tennessee) was the only Republican senator to vote against this version of the bill and it received no Democratic Party support.

Differences between the House and Senate bills were reconciled in a conference committee that signed the final version on December 15, 2017. The final version contained relatively minor changes from the Senate version. The House passed the penultimate version of the bill on December 19, 2017. In the December 19 vote, the same Republicans who voted against the original House bill still voted against it (with the exception of Tom McClintock, who voted in favor on December 19 after having voted against the original House bill). However, several provisions of the bill violated the Senate's procedural rules, which meant that the House of Representatives needed to re-vote with the objectionable provisions removed. The Senate passed the final bill, 51–48, on December 20, 2017; all Senate Republicans voted for the bill except Sen. John McCain, who was absent for health reasons. On the same day, a re-vote was held in the House; the bill passed with a vote of 224–201. President Donald Trump then signed the bill into law on December 22, 2017.

Differences between the House and Senate bills

There were important differences between the House and Senate versions of the bills, due in part to the Senate reconciliation rules, which required that the bill impact the deficit by less than $1.5 trillion over ten years and have minimal deficit impact thereafter. (The Byrd Rule allows senators to block legislation if it would increase the deficit significantly beyond a ten-year period.) For example:

The House plan had four income tax brackets ranging from 12% to 39.6%, while the Senate bill kept seven brackets ranging from 10% to 38.5%.

The House plan cut the corporate tax immediately, while the Senate plan delayed it until 2019.

The House plan made both individual and corporate taxes "permanent" (i.e., no set expiration) while the Senate bill had most of the individual tax cuts expiring (but not the business cuts).

The House plan did not repeal the health insurance individual mandate, while the Senate bill and final Act did.

The House plan eliminated deductions for state, local, and sales taxes paid, and capped property deductions at $10,000. The Senate bill initially would have eliminated the state and local property tax deduction, but in the later Act, this was later changed back to a $10,000 mirroring the House version.

The House plan allowed parents to put aside money for an unborn child's college education. The Senate bill did not include this provision.

The House plan capped the deduction for mortgage interest to the first $500,000 mortgage debt versus the current $1 million, while the Senate did not change it.

The House plan repealed the Johnson Amendment. Neither the Senate version nor the final Act included a repeal of the Johnson Amendment.

Impact

A 2024 study on the impact of the TCJA found that "the TCJA clearly raised federal debt and increased after-tax incomes, disproportionately increasing incomes for the most affluent. Its effects on GDP and median wages seem modest at best, although clear counterfactuals are difficult to identify. The impact on investment is less certain." Another 2024 study, which analyzed the corporate tax cut in the TCJA (which was the largest such cut in US history), found that the tax cut reduced corporate tax revenue by 40 percent and increased corporate investment by 11 percent. The study also found that the corporate tax cut "increased economic growth and wages by less than advertised by the Act's proponents."

A 2025 study found that the 20% deduction for pass-through business income resulted in a 3-4% increase in business incomes. However, aside from that, there was "little evidence of changes in real economic activity as measured by physical investment, wages to non-owners, or employment."

Estimated impact

According to a 2017 report by the nonpartisan Tax Policy Center, the TCJA was expected to lower taxes by an average of $1,600 in 2018 and 2025. The top 20% of Americans by income were projected to receive roughly 65% of the tax savings. The TPC estimated that the bottom 80% of taxpayers (income under $149,400) would receive 35% of the benefit in 2018, 34% in 2025 and none of the benefit in 2027, with some groups incurring costs. TPC also estimated 72% of taxpayers would be adversely impacted in 2019 and beyond, if the tax cuts are paid for by spending cuts separate from the legislation, as most spending cuts would impact lower- to middle-income taxpayers and outweigh the benefits from the tax cuts.

The tax cuts contained in the Tax Cuts and Jobs Act were expected to increase deficits thereby stimulating the economy, increasing GDP and employment, relative to a forecast without those tax cuts. CBO reported on December 21, 2017: "Overall, the combined effect of the change in net federal revenue and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units".

The Tax Policy Center (TPC) reported its macroeconomic analysis of the November 16 Senate version of the Act on December 1, 2017:

Gross domestic product would be 0.4% higher on average each year during the 2018–2027 period relative to the CBO baseline forecast, a cumulative total of $961 billion higher over ten years. TPC explained that since most tax reductions would benefit high-income households (who spend a smaller share of tax reductions than lower-income households) the effect on GDP would be modest. Further, TPC reported that: "Because the economy is currently near full employment, the impact of increased demand on output would be smaller and diminish more quickly than it would if the economy were in recession."

The Penn Wharton Budget Model (PWBM) estimated relative to a prior law baseline that by 2027:

The GDP level would be between 0.6% and 1.1% higher.

Debt would increase by between $1.9 trillion and $2.2 trillion, including macroeconomic feedback effects. Analysis of first-year results released by the Congressional Research Service in May 2019 includes:

Actual impact

According to Bloomberg, the TCJA has simplified the tax code for some, but not others; has lowered corporate debt; has led investment to temporarily increase before declining; and has brought money back from overseas without bringing back business activity. The TCJA also cut taxes for most U.S. taxpayers.

In 2018, more than 90 Fortune 500 companies had "paid an effective federal tax rate of 0% or less" as a result of Donald Trump's Tax Cuts and Jobs Act of 2017.

In the spring of 2019, both The New York Times and the Washington Post stated that most American taxpayers had received tax cuts under the TCJA.

The Tax Policy Center stated in 2019 that the TCJA had lowered individual income taxes for approximately 65% of U.S. households, had raised individual income taxes for approximately 6% of American households, and had left taxes about the same for the remainder of U.S. households.

In October 2017, the Council of Economic Advisers estimated that the corporate tax cut contained within the TCJA would increase real median household income by $3,000 to $7,000 annually. However, during the first year following enactment of the TCJA, real median household income increased by $553; the Census Bureau characterized this increase as statistically insignificant.

In 2018, companies spent a record-setting $1.1 trillion to buy back their own stock, and a majority of major firms (84%, as polled by the National Association for Business Economics) did not alter their hiring practice or their investment in their business in response to the tax cuts they received. This pattern was evident even in early 2018, when Bloomberg reported (based on an analysis of 51 S&P 500 companies) that an estimated 60% of corporate tax savings was going to shareholders, while 15% was going to employees. A Bloomberg Economics analysis found that, while business investment did increase in 2018, relatively little of that activity could be attributed to lower taxes. A study by the Federal Reserve Bank similarly found that corporations bought-back stock and paid down debt, rather than undertake either new capital expenditure or investment in research & development.

Reception

Support

Leading Republicans supported the bill, including President Donald Trump and Vice President Mike Pence, and Republicans in Congress, such as:

Paul Ryan, Speaker of the United States House of Representatives (R-WI)

Mitch McConnell, Majority Leader of the United States Senate (R-KY)

Kevin McCarthy, House Majority Leader (R-CA)

In the Senate, Republicans "eager for a major legislative achievement after the Affordable Care Act debacle ... have generally been enthusiastic about the tax overhaul."

A number of Republican senators who initially expressed trepidation over the bill, including Ron Johnson of Wisconsin, Susan Collins of Maine, and Steve Daines of Montana, ultimately voted for the Senate bill.

The Trump Administration's Council of Economic Advisors supported the bill, claiming it would have significant economic benefits. President Trump and Treasury Secretary Steve Mnuchin claimed that the law's tax cuts would pay for themselves. Many Republican supporters of the tax bill characterized it as a simplification of the tax code.

Opposition

Democrats opposed the legislation, viewing it as a giveaway to corporations and high earners at the expense of middle class communities. Every House Democrat voted against the bill when it came to the House floor, and 13 Republicans joined them in doing so.

The top congressional Democrats—Senate Minority Leader Chuck Schumer of New York and House Minority Leader Nancy Pelosi—strongly oppose the bill. Schumer said of the bill that "The more it's in sunlight, the more it stinks." Pelosi said the legislation was "designed to plunder the middle class to put into the pockets of the wealthiest 1 percent more money".

The 13 House Republicans who voted against the bill were mostly from New York, New Jersey, and California, and several were opposed to the $10,000 cap on the state and local income tax deduction.

Billionaire and former Mayor of New York Michael Bloomberg called this tax bill an "economically indefensible blunder", arguing that companies would not invest more because of the tax cuts.

Bill Gates and Warren Buffett also thought that Trump's tax cut would not help businesses. In a CNBC interview, Buffett said: "I don't need a tax cut in a society with so much inequality".

In a letter made public on the November 12, 2017, more than 400 millionaires and billionaires (which include George Soros and Steven Rockefeller) asked Congress to reject the Republican tax plan. They stated that it would disproportionately benefit the wealthy while adding at least $1.5 trillion to the national debt.

The Economist was also critical of the tax cut: "The expiry of tax cuts for individuals is a ticking time-bomb in the tax code. It will explode just as America approaches a budget crisis, driven by rising spending on health care and pensions for the elderly. This gap will probably eventually be plugged by a combination of tax rises and spending cuts. But by cutting taxes now, Republicans have moved the starting point for any future negotiations".

The Financial Times argued that this bill was "built for plutocrats" as it would mainly benefit very high income households ("45 per cent of the tax reductions in 2027 would go to households with incomes above $500,000 – fewer than 1 per cent of filers").

Views of economists

While there was no clear consensus among academic economists as to whether the tax plan would benefit the economy to the degree that first Trump administration predicted, there was a consensus that it would widen public deficits and economic inequality.

In a survey conducted by the University of Chicago's Initiative on Global Markets, 37 out of 38 economists interviewed stated that they thought the Act would cause a rapid increase in the national debt. The one dissenting economist later changed his mind. Conversely, only one economist (Stanford's Darrell Duffie) out of the 38 agreed with the statement: "If the US enacts a tax bill similar to those currently moving through the House and Senate—and assuming no other changes in tax or spending policy—US GDP will be substantially higher a decade from now than under the status quo".

Four winners of the Nobel Prize in Economics have spoken out against the legislation: Joseph Stiglitz, Paul Krugman, Richard Thaler, and Angus Deaton.

Princeton economist Alan Blinder, who served as Vice Chair of the Federal Reserve System from 1994 to 1996, argued, in an article published by The Wall Street Journal, that "almost everything was wrong" with the Trump Tax Cut and that "it blew a large hole in the federal deficit".

A group of 137 economists signed an open letter expressing support for the bill; the letter was touted by President Trump, House Speaker Paul Ryan and the Senate Finance Committee as support for the legislation among economists; the letter was criticized by left-liberal publications that cited independent research which contradicted some of its claims and alleged that it contained signatories who did not exist. A group of nine economists (largely from the Reagan and Bush administrations) wrote a letter which estimated 3 percent growth from the reduction in the corporate tax rate within a decade; the letter was challenged by Harvard economists Larry Summers and Jason Furman (both of whom served in the Obama administration), and the nine economists appeared to back off from their original claims.

According to The Guardian, thirteen tax law professors from around the US, in a 68-page study, called the law's process "rushed and secretive" that resulted "in deeply flawed legislation".

Political significance

In November 2017, Senator Lindsey Graham (R-SC) said that "financial contributions will stop" flowing to the Republican Party if tax reform is unable to be enacted. This echoed comments by Representative Chris Collins (R-NY), who said, "My donors are basically saying 'get it done or don't ever call me again.'"

Excluded provisions before passage

Some provisions were initially proposed for inclusion in the bill, but were excluded before final passage.

Tuition waiver exemption

The bill that passed the House had been criticized for its significant negative impact on graduate students. Graduate students in private universities could have seen their effective tax rate go above 41.9%, a rate higher than what even the richest of Americans typically pay. The change was due to a provision in the bill that would have repealed the deduction for qualified tuition and related expenses, meaning that graduate students' waived tuition would be viewed as taxable income. Given that their stipends are significantly less than the waived tuition, this would typically increase their taxes by 30–60% for public universities and hundreds of percent for private ones. The Senate version of the bill did not contain these provisions.

The House bill's disadvantageous treatment of graduate students was criticized because of its projected negative effect on the training of U.S. scientists. The bill's impact on U.S. science and innovation had been criticized by Stanford professor emeritus Burton Richter, a winner of the Nobel Prize in Physics and the National Medal of Science, who critiqued the bill's negative impact on Americans seeking advanced degrees and wrote that the budget impact of the tax cuts would force a dramatic reduction in federal funding for scientific research.

The final version of the Act reflected the Senate's language in this area, maintaining the prior law's tax exemption for tuition waivers.

Automatic spending cuts averted/PAYGO

Under the Statutory Pay-as-You-Go Act of 2010 (PAYGO), laws that increase the federal deficit will trigger automatic spending cuts unless Congress votes to waive them. Because the Act adds $1.5 trillion to the deficit, automatic cuts of $150 billion per year over ten years would have applied, including a $25 billion annual cut to Medicare. Because the PAYGO waiver is not allowed in a reconciliation bill, it requires separate legislation which requires 60 votes in the Senate to end a filibuster. If Congress had not passed the waiver, it would have been the first time that statutory PAYGO sequestration would have occurred. However, the PAYGO waiver was included in the continuing resolution passed by Congress on December 22 and signed by President Trump.

Public opinion

Analysis by FiveThirtyEight in November 2017 found the pending tax law to be the least-popular major tax bill in at least 36 years, including the tax increases of 1990 and 1993. Apart from February 12, 2018, the RealClearPolitics composite of polls has indicated that at least a plurality of Americans has disliked the law from October 2017 through December 2018.

Follow-on bills

House Republicans have written follow-on bills that would extend the individual tax cuts beyond their current expiration date, simplify the rules for Individual Retirement Accounts, and add new tax deductions for small businesses.

The follow-on bills were written as three separate bills, named the Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760), the Family Savings Act (H.R. 6757), and the American Innovation Act of 2018 (H.R. 6756).

On September 27, the House of Representatives passed the Family Savings Act by a vote of a 240–177, and then it passed the American Innovation Act by a vote of 260–156.

On September 28, the House of Representatives passed the Protecting Family and Small Business Tax Cuts Act by a vote of 220–191. Several Republicans in the House voted against the bill to make permanent the $10,000 annual limit on federal tax deductions for state and local taxes because they represent states where residents tend to pay higher state and local taxes.

The Build Back Better Act, in the version passed by the House in November 2021 (to be reconciled with the Senate), repeals or partially reverses various provisions of the 2017 act, according to the summary given by House speaker Nancy Pelosi in her speech on the morning of passage.

Subsequent legal challenges of the Affordable Care Act

The zeroing out of the individual mandate through this Act resulted in several states filing legal challenges to the constitutionality of the entire ACA based on the Supreme Court's prior decision in National Federation of Independent Business v. Sebelius (2012), which justified the individual mandate as an allowable tax; these legal challenges were led by the state of Texas. In December 2018, Judge Reed O'Connor of the District Court of Northern Texas issued his opinion in agreement with the states that without the individual mandate, the whole of the ACA had no standing. California and several other states led the appeal of the case to the Fifth Circuit Court. The Fifth Circuit affirmed in part with O'Connor's opinion on the unconstitutionality of the ACA without the individual mandate in December 2019. The case was raised to the Supreme Court to be heard as California v. Texas during the court's 2020–21 term; in a 7–2 decision issued on June 17, 2021, the Court ruled that Texas and other states that initially challenged the individual mandate did not have standing, as they had not shown past or future injury related to the provision. The Supreme Court otherwise did not rule on the constitutionality of the individual mandate in this case.

Permanent extension

In May 2024, the Congressional Budget Office estimated that extending the provisions expiring in 2025 would add $4.6 trillion in deficits over 10 years.

In July 2024, the Associated Press cited leading economists who estimated it would add over $5 trillion to the debt.

Economists across the political spectrum have expressed concern that an extension would boost inflationary pressures.

The Economist said extending the 2017 tax cuts would worsen America's dire fiscal trajectory, which would see growing inflation without significant tax increases or cuts to spending.

The Urban-Brookings Tax Policy Center estimated that the top 5% of earners would get 45% of the benefits if extended.

During his 2024 campaign, Trump advocated for extending all of the tax cuts and adding additional cuts including on corporations, tips, and social security payments. In May 2025, during his presidency, the House Budget Committee approved a bill (the One Big Beautiful Bill Act) to do this. The legislation passed both houses of Congress, with Vice President JD Vance casting a tie-breaking vote in the Senate. On July 4, 2025, Trump signed the bill into law, extending the personal tax cuts indefinitely.