Why TPC Revised Its Estimates Of Business Tax Proposals Pending In the Post-Election Congress

The Tax Policy Center has revised its estimates of the revenue cost and distributional effects of business tax cuts included among several tax changes currently pending in the post-election session of Congress.

Under current law, expanded bonus depreciation (enacted through the 2017 Tax Cuts and Jobs Act) is scheduled to phase out beginning in 2023. TPC analyzed the effects of eliminating that phase-out. However, TPC incorrectly relied on an outdated Joint Committee on Taxation (JCT) estimate of the revenue effects of that change. TPC also made its own calculation error in its analysis.

Correcting these errors resulted in a significantly smaller revenue loss and different distributional effects than TPC initially estimated for bonus depreciation. TPC also made minor adjustments to its projections of the cost of extending greater deductibility of business interest expenses and the ability of firms to expense their research costs.

TPC is committed to providing rigorous, timely, and independent facts, analysis, and insights about America’s tax system. We deeply appreciate the trust placed in us by policymakers, journalists, advocates, stakeholders, researchers, and the public. We know we fell short this time. We regret the error and will work hard to meet our high standards for rigor and transparency going forward.