4 Undisputable Benefits of Tax Reform

Americans face a looming fiscal cliff in 2025 — a perfect storm of expiring tax cuts and subsidies that could devastate our economy.

And with millions of Americans still reeling from soaring prices at the grocery store and the gas pump, Americans can’t afford a new tax hike.

But if Congress fails to act, that’s exactly what you’ll get.

When the Tax Cuts and Jobs Act went into effect in 2018, it created millions of jobs and sparked a massive economic boom — slashing the average American’s tax bill by $1,600.

And after eight years of debate about the impact of the TCJA, the economic research points to one conclusion:

The 2017 tax cuts were an unmitigated success that benefited American families, workers, and the economy.

If these tax cuts go away in 2025, most Americans will face higher taxes, more inflation, fewer jobs, and less opportunity — at a time when they can least afford it.

Here are four key benefits of the TCJA at risk if Congress fails to act:

1. Spurring American jobs

The TCJA transformed the job market and had an immediate and significant impact on employment. This job growth trajectory was only interrupted by the unprecedented pandemic, suggesting that maintaining these tax policies could help restore and exceed these employment levels.

• In just 28 months following its implementation in December 2017, the United States added 5 million new jobs.
• The unemployment rate reached a 50-year low of 3.5% in September 2019.

2. Income growth to combat inflation

American workers were the biggest winners, seeing a significant boost in wages and incomes. These income gains have become particularly crucial as Americans face increasing inflation pressures.

• Inflation-adjusted median income reached an all-time high of $78,250 in 2019, an 8.5% increase from 2017.
• Real wages and salaries surpassed pre-TCJA projections by $3.6 trillion.
• At least 870,000 Americans received bonuses of $1,000 or more following the implementation of the tax cuts.

3. Accelerated economic growth

The U.S. economy experienced rapid growth after the tax cuts, resulting in significant economic expansion and encouraging both individual and business investment in the American economy.

• The Congressional Budget Office projects that GDP will be $12 trillion higher than expected.
• Private investment is estimated to exceed pre-TCJA projections by $4 trillion.

4. Higher-than-expected tax revenue

Comparing congressional projections from before and after the TCJA shows that revenue far exceeded government expectations after the tax cuts were signed into law:

• Through 2025, federal tax revenues are projected to be nearly $620 billion higher than pre-TCJA estimates.
• Through the first 10 years of the TCJA, federal tax revenues are estimated to be $2.7 trillion higher than projected after the passage of the TCJA (2018-2027).

Congress must act

The 2017 tax cuts created millions of jobs and sparked a new wave of sustained economic growth for all Americans. Given the looming fiscal cliff, Congress must extend the TCJA and give struggling Americans a lifeline.

Download and share this simple infographic here to help spread the word about why the TCJA was a major boon for American workers and businesses.