Center for American Progress

RELEASE: The Tax Cuts and Jobs Act Failed To Deliver Promised Benefits
Press Release

RELEASE: The Tax Cuts and Jobs Act Failed To Deliver Promised Benefits

Washington, D.C. — A new Center for American Progress issue brief examines recent research on how the 2017 Tax Cuts and Jobs Act (TCJA) failed to deliver promised benefits to workers, families, and the nation’s economy.

The TCJA was costly and disproportionately slashed taxes for corporations and the wealthy. As Congress prepares to debate the future of the law’s temporary changes to personal and estate tax provisions, this issue brief reviews claims made by proponents during the initial debate over the bill and reviews recent research that shows how the corporate tax changes in the TCJA failed to live up to those promises and must be reformed as part of the debate over the future of the 2017 law. Some of the key takeaways from this issue brief include: 

  • The benefits of the corporate changes were even more skewed toward the wealthy than those in the law as a whole, with the top 1 percent of the income distribution receiving a full third of the benefits of the corporate tax revisions but just 20 percent of the reduction from the bill as a whole.  
  • New research finds that the benefits of TCJA’s corporate rate cuts overwhelmingly benefited high-wage earners, executives, and shareholders, not low- or middle-waged workers. The same research found that slightly more than $1 out of every $6 of the gains from the corporate tax cut went to foreign owners of equity in U.S. corporations. 
  • Despite proponents’ claims that the tax cuts would “pay for themselves,” corporate tax collections remained relatively flat, while profits have increased significantly. The tax cut had a modest, at best, impact on investment. A substantial fraction of corporations’ savings from the tax cut went toward stock buybacks, raising share prices and disproportionately benefiting the wealthy. 

“Overwhelming evidence shows that the TCJA failed to deliver on its promised benefits, and the data back it up. It did, however, significantly reduce corporate tax collections, diverting resources from public investment to the pockets of wealthy shareholders, executives, and the highest-paid workers,” said Jean Ross, senior fellow at CAP and author of the issue brief.  

Read the issue brief: “The Tax Cuts and Jobs Act Failed To Deliver Promised Benefits” by Jean Ross 

For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].

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