The TCJA: What Might Have Been

The Tax Cuts and Jobs Act was passed into law on a dramatically accelerated schedule. That speed and the enormous scope of the TJCA and its individual elements suggests that alternatives may have been overlooked. The consequences of a proposed change in tax law are usually estimated with a microsimulation model, but analyzing the large number of possible alternatives to each of the many interconnected elements of the TCJA requires numerous separate estimates. We accomplish this with the Tax Policy Center’s cloud-based microsimulation model, examining over nine thousand alternative changes to certain deductions, credits, and tax rates changed under the TCJA. We illustrate both the trade-offs among the plans and those plans satisfying various criteria, such as minimum revenue loss conditional on a desired distribution of taxes and flattest distribution of taxes conditional on a given revenue loss.