The Tax Cuts and Jobs Act (Nov 2017)

Tables show the distributional results of the Tax Cuts and Jobs Act by Expanded Cash Income Level in 2027.

Table shows tax units with a tax increase or tax cut under the major provision in the Tax Cut's and Jobs Act by Expanded Cash Income Level in 2018. Due to data limitations, excludes the following provisions: repeal of credit for adoption expenses; repeal of deduction for moving expenses; limitation on exclusion of employee achievement awards and certain other fringe benefits; repeal of exclusion for qualified moving expense reimbursement; reduction in minimum age for allowable in-service distributions; small business accounting method reform and simplification; modifications to state and local bond interest (portion attributable to pass-through entities); and repeal of technical termination of partnerships. 

Table shows tax units with a tax increase or tax cut under the major provision in the Tax Cut's and Jobs Act by Expanded Cash Income Level in 2027. Due to data limitations, excludes the following provisions: repeal of credit for adoption expenses; repeal of deduction for moving expenses; limitation on exclusion of employee achievement awards and certain other fringe benefits; repeal of exclusion for qualified moving expense reimbursement; reduction in minimum age for allowable in-service distributions; small business accounting method reform and simplification; modifications to state and local bond interest (portion attributable to pass-through entities); and repeal of technical termination of partnerships. 

Table shows the effect marginal tax rates on wages and salaries under current law and the Tax Cuts and Jobs Act by Expanded Cash Income Level in 2018. We calculate effective marginal tax rates by adding $1,000 to wages and salaries and recomputing tax liability. Our computation includes the impact of the alternative minimum tax and the phase-in and phase-out of credits and other tax provisions. We assume that under the proposal, a certain fraction of individuals recharacterize their wage and salary income as business income eligible for the preferential rates. For these individuals, we also assume that the increment to wages and salary is recharacterized as business income. We assume that the increase in wages does not change the reported amount of any deductions, exclusions, or other forms of income. Effective marginal tax rates are weighted by current-law wages and salaries.

Table shows the effect marginal tax rates on capital income under current law and the Tax Cuts and Jobs Act by Expanded Cash Income Level in 2018. We calculate effective marginal tax rates by adding $1,000 to the income source and recomputing tax liability. Our computation includes the impact of the alternative minimum tax and the phase-in and phase-out of credits and other tax provisions. We assume that the increase in income does not change the reported amount of any deductions, exclusions, or other forms of income. Effective marginal tax rates are weighted by the appropriate income source.

Table shows the effect marginal tax rates on wages and salaries under current law and the Tax Cuts and Jobs Act by Expanded Cash Income Level in 2027. We calculate effective marginal tax rates by adding $1,000 to wages and salaries and recomputing tax liability. Our computation includes the impact of the alternative minimum tax and the phase-in and phase-out of credits and other tax provisions. We assume that under the proposal, a certain fraction of individuals recharacterize their wage and salary income as business income eligible for the preferential rates. For these individuals, we also assume that the increment to wages and salary is recharacterized as business income. We assume that the increase in wages does not change the reported amount of any deductions, exclusions, or other forms of income. Effective marginal tax rates are weighted by current-law wages and salaries.

Table shows the effect marginal tax rates on capital income under current law and the Tax Cuts and Jobs Act by Expanded Cash Income Level in 2027. We calculate effective marginal tax rates by adding $1,000 to the income source and recomputing tax liability. Our computation includes the impact of the alternative minimum tax and the phase-in and phase-out of credits and other tax provisions. We assume that the increase in income does not change the reported amount of any deductions, exclusions, or other forms of income. Effective marginal tax rates are weighted by the appropriate income source.