#TrumpTaxCuts

The Trump tax cut, officially known as the Tax Cuts and Jobs Act (TCJA), was signed into law by President Donald Trump on December 22, 2017. This sweeping tax overhaul had major implications for individual and corporate taxation.

*Key Provisions:*

- *Individual Income Tax Changes:*

- Reduced tax rates across seven brackets, with rates ranging from 10% to 37%

- Doubled standard deduction to $12,000 for single filers and $24,000 for married couples

- Limited state and local tax (SALT) deductions to $10,000

- Eliminated personal exemptions

- *Corporate Tax Changes:*

- Slashed corporate tax rate to a flat 21%

- Shifted from global to territorial tax system, taxing only income earned within the US

- Eliminated Corporate Alternative Minimum Tax

- *Other Changes:*

- Doubled child tax credit to $2,000

- Limited mortgage interest deduction for new homes to $750,000

- Increased estate tax exemption to $11.2 million

*Impact:*

- The TCJA led to an estimated 11% increase in corporate investment

- After-tax incomes increased disproportionately for the most affluent

- Federal debt increased due to lost revenue

- Economic growth and median wage effects were modest

*Expiration:*

- Many individual tax cuts are set to expire in 2025

- Extending these cuts could add $4.6 trillion to deficits over 10 years, potentially boosting inflationary pressures.