In 60 Seconds: The Tax Reform Debate

*PDF Download: In 60 Seconds – The Tax Reform Debate

The Tax Cuts and Jobs Act (TCJA) reduced taxes for American workers and businesses, but the individual tax cuts and provisions will expire in 2025.

Congress should make the TCJA provisions permanent for individuals. This would give taxpayers certainty that their taxes will not suddenly rise in 2026 and empower them to budget and plan for the future.

Here’s the issue of tax reform in 60 seconds:

What’s at Stake:

The Tax Cuts and Jobs Act (TCJA) reduced taxes for American workers and businesses, but the
individual tax cuts and provisions will expire in 2025.

Bad Solution: Repeal the tax cuts or allow the individual tax cuts to expire.

The TCJA:

• Delivered a tax cut to 90 percent of taxpayers. (IRS tax withholding tables)
• Cut income taxes for individuals across all income levels—by more than $500 for almost half
  of taxpayers. (Joint Committee on Taxation)
• Saved households $1,400 on average and married couples with two children $2,917 in 2018.
  (Heritage Foundation)
• Cut taxes for taxpayers in every state in 2019. (Institute on Taxation and Economic Policy)
• Increased taxes for only 6 percent of taxpayers. (Tax Policy Center)
• By 2025, will allow the typical American household to keep $26,000 more in take-home pay,
  or $44,697 for a family of four (Heritage Foundation).

Companies passed tax savings from the TCJA on to workers:

• At least 3 million U.S. workers received wage increases and bonuses.
• New parents in low- and middle-income jobs now have paid parental leave at companies
  including Chipotle, Dollar Tree, Lowes, and CVS.

The tax cuts boosted economic growth to 3.2 percent and are projected to add 1.5 million
cumulative full-time jobs to the economy by 2025.

A Better Path Forward: Make the tax cuts permanent.

Congress should make the TCJA provisions permanent for individuals. This would give
taxpayers certainty that their taxes will not suddenly rise in 2026 and empower them to
budget and plan for the future.

Extending the tax package would also have a positive long-term impact. It’s projected to
increase long-run GDP by 2.2 percent points, increase wages by nearly 1 percentage point, and
add 1.5 million full-time jobs.

 Addressing Concerns: