The Tax Cuts and Jobs Act, introduced as H.R. 1 on November 2, 2017 and amended by Chairman Brady on November 3, 2017, proposes major changes to the individual and corporate income taxes, estate and gift
taxes, and certain federal excise taxes. The Tax Policy Center has produced preliminary distributional estimates of the legislation. We find the following:
• Taxes would fall for all income groups on average in 2018, increasing overall average after-tax income by 1.5 percent. The largest tax cuts would go to higher-income taxpayers.
• Overall, the tax cut would be smaller in 2027, because of the expiration of certain provisions in 2023 (including the new $300 family credit and 100 percent bonus depreciation), the effect of indexing tax parameters to a slower-growing measure of inflation, and the substitution of a child credit that is not indexed for inflation for personal exemptions that are indexed.
• Some taxpayers would pay more in taxes under the proposal. In 2018, slightly more than 12 percent of taxpayers would experience a tax increase relative to current law. That share would rise to slightly more than 28 percent in 2027.