#TrumpTaxCuts

Trump Tax Cuts Explained

The Trump Tax Cuts generally refer to the Tax Cuts and Jobs Act (TCJA), signed into law by President Donald Trump in December 2017. It was one of the largest changes to the U.S. tax code in decades, aiming to stimulate economic growth by reducing taxes for individuals and businesses.

For individuals, the TCJA lowered tax rates across most income brackets and nearly doubled the standard deduction. It also increased the child tax credit and limited deductions for state and local taxes (SALT) to $10,000. While many Americans saw lower tax bills initially, some residents in high-tax states paid more because of the SALT cap.

For businesses, the changes were even more significant. The corporate tax rate was permanently reduced from 35% to 21%, aiming to make American companies more competitive internationally. The TCJA also created a 20% deduction for certain small businesses and pass-through entities.

Supporters argue that the tax cuts spurred economic growth, reduced unemployment, and increased business investment. Critics, however, point out that much of the benefits went to corporations and the wealthy, and that the law contributed to higher federal deficits.

Many of the individual tax cuts are set to expire after 2025, unless extended by Congress. Corporate tax cuts, however, are permanent under current law.

In summary, the Trump Tax Cuts were a major shift in U.S. tax policy, with lasting impacts on individuals, businesses, and government finances.