Actual corporate income tax revenue in FY2018 was $135 billion lower than CBO’s projection from 2017—almost exactly a 40% decline. President Donald Trump’s administration promised that the 2017 Tax Cut and Jobs Act would add $1.8 trillion in new revenue. Tax Cuts and Jobs Act The Trump Administration achieved one of its top legislative goals by enacting the first comprehensive tax reform legislation in over 30 years. The 2017 Tax Cuts and Jobs Act is the most sweeping update to the U.S. tax code in more than 30 years. Guidance for the Brookings community and the public on our response to the coronavirus (COVID-19) », Learn more from Brookings scholars about the global response to coronavirus (COVID-19) ». Fact-based guides to 2020 election policy issues by Brookings experts, Brookings experts’ bold ideas for policymakers and campaigns, Participate in events where Brookings experts discuss what’s at stake in the 2020 election, Videos and podcasts about key issues in the 2020 election. 1) designed to cut taxes on individuals and businesses, stimulate the economy, and create jobs. Better Budget Process Initiative: Automatic CRs Can Improve the Appropriations Process, Citizens Against Government Waste’s 2020 Pig Book Highlights Appropriations Abuses, Maya MacGuineas Joins ABC News Live to Discuss Payroll Tax Deferral. Source: Joint Committee on Taxation via the Ways and Means Committee. I thank Grace Enda and Claire Haldeman for outstanding research assistance. Our brand new, state-of-the-art interactive COVID Money Tracker tool follows every dollar authorized and spent by Congress, the Federal Reserve, and... A government shutdown could occur at the end of this month. Given that the economy grew in 2018, and in the absence of another policy that could have caused a large revenue loss, the data imply that the 2017 tax cut substantially reduced revenues. The TCJA did not pay for itself, nor is it likely to do so in the future. According to House Ways and Means Committee Chairman Kevin Brady (R-TX), today's Tax Cuts and Jobs Act will add $1.51 trillion to the debt, before accounting for interest or possible gimmicks. Brookings unpacks the issues shaping the 2020 election through fact-based analysis. William Gale, Hilary Gelfond, Aaron Krupkin, Mark J. Mazur, and Eric Toder summarize the provisions of the bill and provide preliminary analysis of their effects. Individual tax cuts make up another $300 billion, and the ultimate repeal of the estate tax accounts for the remaining $200 billion. For individual income taxes, actual collections in FY2018 were $97 billion, or 5.4%, below pre-TCJA projections. It also reduced income taxes for most Americans. Almost every major analysis of the legislation correctly predicted that revenues would fall in 2018 relative to a scenario without the tax cuts, with sources ranging from government entities such as the CBO and the Joint Committee on Taxation, to non-governmental think tanks such as the Urban-Brookings Tax Policy Center and the Tax Foundation, academic researchers in studies by Robert Barro and Jason Furman, and in analyses using the Penn-Wharton Budget Model. Excluding the Tax Foundation, which is an outlier in these estimates, drops the average offset to less than 20%. Some provisions of the TCJA that affect individual taxpayers can also affect business taxes. William G. Gale argues the recent tax cuts will only make fighting future recessions more complicated. None of these findings should be surprising. Of the $1.5 trillion cost, roughly $1 Adjusted for the size of the economy, they fell even more.