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1 Huaqun Li & Kyle Pomerleau, The Distributional Impact of the Tax Cuts and Jobs Act over the Next Decade 1 (2018)

handle is hein.taxfoundation/dtrbitx0001 and id is 1 raw text is: 

The Distributional Impact of the

Tax Cuts and Jobs Act over the

Next Decade

No. 596
June 2018

Huaqun   Li

Kyle Pomerleau
Economist and
Director, Center for Quantitative Analysis

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@2018 Tax Foundation
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Editor, Rachel Shuster
Designer, Dan Carvajal
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Key Findings

  *   The Tax Cuts and Jobs Act (TCJA) made changes to both the individual
      income and corporate income tax, while scaling back the estate and gift tax.

  *   Over the next decade, we estimate that the TCJA will reduce federal
      revenues by about $1.8 trillion on a conventional basis. In addition, we
      estimate that the economy would be about 2 percent larger on average than
      it otherwise would have been between 2018  and 2027.

  *   Lower tax liabilities and higher output will boost taxpayer after-tax income,
      but the impact will differ over time due to many provisions phasing in or
      expiring over the next decade.

  *   Using the Tax Foundation model, we estimate the distributional impact of the
      TCJA for each year over the next decade (2018-2027) on both a conventional
      and dynamic basis.

  *   On a conventional basis, the TCJA would result in an increase in after-tax
      income for taxpayers in all income groups from 2018 to 2025.

  *   In 2026 and 2027, the expiration of the individual income tax cuts will result
      in a reduction of after-tax income for taxpayers in all income groups relative
      to prior law on a conventional basis.

  *   On a dynamic basis, the larger economy will result in higher after-tax incomes.
      However, the economic  impact of the TCJA will be modest in the first few
      years but increase as the economic effects phase in over time.

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