“JCT” refers to the nonpartisan Joint Committee on Taxation which produces all revenue estimates for Congress.
“CBO” refers to the nonpartisan Congressional Budget Office.
“TPC” refers to the nonpartisan Tax Policy Center.
Tax Reform Timeline
CONFERENCE AGREEMENT – Key Docs: JCT Distributional Analysis • TPC Distributional Analysis • Updated Revenue Estimates • Conference Report including Joint Statement of Managers • Text • CBO Cost Estimate • CQ Comparison of Conference Report, House, and Senate Bills • TPC side-by-side
COMPARISON OF HOUSE AND SENATE BILLS: JCT comparison of House and Senate bills • CQ comparison of House and Senate bills • Tax Policy Center “Comparing Current Law and ‘Tax Cuts and Jobs Act,’ 2018” • CRFB Comparison of House and Senate versions
SENATE BILL – Key Docs: Text • 12/2 Vote • Treasury Estimate /CRFB Response • Key Changes • JCT Estimates of Changes • JCT Revenue Estimates • JCT Distributional Analysis • TPC Analysis • CBO Projects $1.4 Trillion Deficit Increase • JCT Dynamic Analysis Projects Deficits Increase More than $1 Trillion
Dec. 20, 2017: House voted 224-201 to give final approval to the tax bill, clearing it for the President’s signature.
Dec. 20, 2017: Senate passed the tax bill (minus the offending provisions) 51-48, on a straight party-line vote.
Dec. 19, 2017: House passed tax conference agreement (HR 1) 227-203, with all but 12 Republicans voting yes and all Democrats in opposition. HOWEVER, due to several provisions in the bill that violated Senate rules, the Parliamentarian determined the House would have to vote again on a modified bill following Senate passage.
Dec. 15, 2017: Conference report filed.
Dec. 11, 2017: JCT releases macroeconomic analysis of House-passed bill, concluding that economic growth will not offset revenue losses, leaving a net increase of $1 trillion in the public debt. Also on Dec. 11, the Trump Administration’s Treasury Department released a one-page claim that the Senate tax bill would generate a net increase in revenues due to economic growth, but this drew sharp criticism, with the nonpartisan Committee for a Responsible Federal Budget, saying the Treasury’s work “makes a mockery of dynamic scoring and analysis…. The Treasury Department appears to have drawn a favorable conclusion first and worked backwards from there…. Dynamic scoring can be an important tool to help policymakers understand and structure pro-growth policy changes; simply making up claims because we want them to be true will blunt this tool and damage the policymaking process.”
Dec. 7, 2017: JCT comparison of House and Senate bills (JCT is Congress’ nonpartisan scorekeeper)
Dec. 2, 2017: JCT revenue estimates of Senate passed bill
Dec. 2, 2017: Senate narrowly passed a REVISED tax bill Dec. 2, 2017, by a vote of 51-49.
- Text of Senate-Passed Bill
- Key Changes in Senate Tax Bill – Dec 1 2017 JCT estimates of Changes
- Tax Policy Center analysis of Senate bill
- CBO estimate finding revised Senate tax bill would increase on-budget deficits by $1.47 trillion – Dec 1
- TPC’s economic analysis says Senate tax bill would barely change GDP in 2027 or 2037 – Dec. 1
- JCT Dynamic analysis of Senate bill projecting deficits increase by more than $1 trillion even after including economic growth – Nov. 30
- CBO estimates tax bill would increase deficits $1.4 trillion – Nov. 28
- JCT Distributional analysis of Senate bill – Nov. 24
- JCT Revenue estimates of Senate bill – Nov. 17
Nov. 16, 2017: Senate Finance Committee voted along party lines, 14-12, to forward their tax proposal to the full Senate, after four days of heated debate, during which Republicans substantially revised the measure.
- CBO distributional analysis released 11.27.17 “excluding the effects of eliminating the individual mandate penalty”
- CBO distributional analysis released 11.26.17 providing a summary of total budget impacts and finding, when including the impact of the repeal of the Affordable Care Act mandate, lower-income families are net losers under the Senate tax bill.
- JCT Distributional analysis of the Senate Finance Committee-reported tax bill released by JCT on 11/24.
- JCT Revenue estimates the Senate Finance Committee-reported tax bill released by JCT on 11/17.
- Tax Policy Center analysis: “We find the bill would reduce taxes on average for all income groups in both 2019 and 2025. In general, higher income households receive larger average tax cuts as a percentage of after-tax income…. On average in 2027, taxes would rise modestly for the lowest-income group, change little for middle-income groups, and decrease for higher-income groups. Compared to current law, 9 percent of taxpayers would pay more in 2019, 12 percent in 2025, and 50 percent in 2027.”
- Penn Wharton Budget Model, an analysis issued through the Wharton School of the University of Pennsylvania, found the Senate Finance Committee-reported tax bill — after accounting for additional economic growth — would increase deficits between $1.4 trillion and $1.6 trillion over the next decade.
Nov. 16, 2017: House of Representatives passes H.R. 1, the tax bill reported by Ways & Means Committee.
- Text of House-Passed Bill
- Ways and Means Committee Report
- JCT Distributional analysis of the House-passed tax bill released by JCT on 11/14.
- JCT Revenue estimates of the House-passed tax bill released by JCT on 11/11.
- Tax Policy Center analysis released on 11/13: “We find the legislation would reduce taxes
on average for all income groups in 2018 and 2027. The largest cuts, in dollars and as a percentage of after-tax income, would accrue to higher-in come households. However, not all taxpayers would receive a tax cut under this proposal—at least 7 percent of taxpayers would pay higher taxes under the proposal in 2018 and at least 24 percent of taxpayers would pay more in 2027.”
- Penn Wharton Budget Model, an analysis issued through the Wharton School of the University of Pennsylvania, found the House tax bill — after accounting for additional economic growth — would increase deficits $2.0 trillion over the next decade.
Nov. 14, 2017: ITEP Analysis of SALT Deduction changes: “…four states would see their residents pay more in aggregate federal personal income taxes under the House’s Tax Cuts and Jobs Act. While some individual taxpayers in every state would face a tax increase, only California, New York, Maryland, and New Jersey would see such large increases that their residents’ overall personal income tax payments rise when compared to current law. Californians would face the largest net tax increase, at $12.1 billion in 2027 alone. They are followed by New Yorkers ($4.0 billion in higher income taxes), Marylanders ($430 million), and New Jerseyans ($137 million). Overall, the residents of these four states combined would pay $16.7 billion more in federal personal income taxes by 2027.” See also CRS State and Local Tax Deduction Sept 2015
Nov. 9, 2017: House Ways & Means Committee approved a modified version of their tax bill, on a party-line 24-16 vote. Prior to passage, committee Republicans approved a package of last minute changes to the bill to address concerns of small businesses and reduce the net cost of the bill to the $1.5 trillion limit in the Budget Resolution.
The modifications include provisions to:
- Lower the pass-through tax rate for small businesses to a low 9 percent rate (phased in over 5 years) for pass-through entities on their first $75,000 in net business taxable income (after pressure from small business advocates);
- Increase the repatriation tax on corporate profits held abroad to 14 percent for cash and 7 percent for illiquid assets;
- Restore the adoption tax credit;
- Increase the new tax on private university endowments;]Require business research expenses to be amortized over 5 years; and
- Allow all non-profits, not just churches, to engage in political activity.
While the Ways & Means Committee was completing action on its version of tax bill, Senate Finance Committee Chairman Hatch unveiled the Senate GOP version:
- Senate Finance Committee Chairman’s Mark [released Nov. 9]
- JCT Revenue Estimates of Chairman’s Mark [released Nov. 9]
- Summary of Chairman’s Mark
Nov. 2, 2017: House Ways & Means Committee unveiled the Chairman’s Mark of the “Tax Cuts and Jobs Act” (HR 1)
- CLICK HERE for the JCT description of the Chairman’s Mark [released Nov. 6]
- CLICK HERE for the JCT distributional analysis (by income group) [released Nov. 3]
- CLICK HERE to read the full legislative text of the Tax Cuts and Jobs Act.
- CLICK HERE to read the section-by-section summary of the Tax Cuts and Jobs Act.
- CLICK HERE for JCT revenue estimates (Chairman’s Substitute Amendment to be considered at Ways & Means Committee on Nov. 6)
Sept. 27, 2017: Trump Administration, House and Senate GOP released a “Unified Framework for Fixing our Broken Tax Code.”
Sept 13, 2017: Tax Policy Center study estimates that elimination of all corporate tax breaks would raise about $1.4 trillion in revenue over 10 years, enough to pay for cutting the corporate rate to 26 percent.
August 1, 2017: Senate Democrats’ letter on Tax Reform urging Republicans to work with Democrats on tax reform and laying out three prerequisites: (1) tax reform should not increase middle class taxes or cut taxes for the top one percent; (2) tax reform should be accomplished with open debate and amendments instead of the fast-track Reconciliation process; and (3) tax reform should provide a revenue base that funds critical programs like Medicare, Medicaid, Social Security, and public investments.
July 27, 2017: House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX) issued a joint statement on tax reform that set aside the controversial Border Adjustment Tax proposed last year by the House GOP, and commits to developing a plan to lower rates for individuals and businesses, increases capital expensing, and incentivizes repatriation of corporate profits.
April 26, 2017: White House one-pager: 2017 Tax Reform for Economic Growth and American Jobs The Administration released on April 26, 2017 a one-page skeletal outline of “2017 Tax Reform for Economic Growth and American Jobs.” The outline claims “the biggest individual and business tax cut in American history,” but does not include any revenue estimates to back-up the claim, nor does it indicate whether the several-trillion-dollar cost would be added to the nation’s public debt, or whether the bill would be paid for by offsetting revenue increases. If the several trillion dollar cost is to be deficit-financed, it does not explain how it squares with the impending House GOP budget plan aiming to balance the budget in 10 years. Individual tax reforms in the Trump outline would: reduce the top rate from 39.6% to 35%, and repeal the 3.8% Net Investment Income Tax, the estate & gift tax, and the Alternative Minimum Tax — all benefiting upper income taxpayers. Provisions with broader impact would double the standard deduction and provide unspecified tax relief for families with child and dependent care expenses. Business tax reform goals in the outline aim to reduce the corporate rate from 35% to 15%; and shift to a “territorial tax system” where only domestic profits would be taxed while profits from offshore would be tax-free, unlike the current system where taxes on off-shore profits are deferred, but taxed when brought back to the U.S.. The outline proposes to tax “trillions of dollars held overseas” but offers no details and makes no mention of using repatriation tax revenues for infrastructure--a trial balloon floated earlier in the year. Reduction of the corporate rate to 15% has been estimated by Tax Policy Center to cost $2.4 trillion in the first 10 years and $3.5 trillion in the second 10 years (violating the Senate’s Byrd Rule).
Feb. 21, 2017: Letter from 16 companies to congressional leaders supporting comprehensive tax reform that lowers rates, allows immediate expensing, and incorporates a “more competitive territorial approach to taxing businesses” in which U.S.-based multinational companies pay U.S. tax only on their domestic income.
Dec. 28, 2016: TPC releases “Top ten tax policy issues to watch in 2017”
Dec. 21, 2016: CRS releases report on U.S. International Corporate Taxation
Oct. 18, 2016: TPC releases nonpartisan analysis of Trump Tax Proposals
Sept. 16, 2016: TPC releases nonpartisan analysis of House GOP Tax Reform Plan
- Reduce the current number of brackets from 7 to 3, and dramatically streamline the process. We will work with House Republicans on this plan, using the same brackets they have proposed: 12, 25 and 33 percent. For many American workers, their tax rate will be zero.
- Under my plan, no American company will pay more than 15% of their business income in taxes.
- Eliminate the carried interest deduction and other special interest loopholes.
- Allow parents to fully deduct the average cost of childcare spending from their taxes.
- Bring back trillions of dollars from American businesses that is now parked overseas. Our plan will bring that cash home, applying a 10 percent tax.
- Eliminate the estate tax.
June 24, 2016: House Republicans Release Tax Reform Plan. Highlights:
- Consolidate the system down to three tax brackets, and lower the top individual income tax rate to 33 percent.
- Simplify tax filing for families by creating a larger standard deduction and a larger child and dependent tax credit.
- Streamline education tax benefits.
- Eliminate the alternative minimum tax.
- Reward work by “improving” the EITC.
- Encourage charitable giving by increasing tax incentives.
- Reforming savings provisions.
- Repeal the estate tax.
- Cut taxes on small businesses by creating a separate, low tax rate of 25 percent.
- Cut taxes on savings and investment by allowing families and individuals to deduct 50 percent of the dividends, capital gains, and interest received from stocks and mutual funds.
- Provide a tax-free return on new investment by allowing full and immediate write-offs.
- Transform the corporate tax to a form of Border Adjustment Tax (BAT) called a “destination-based cash flow tax (DBCFT). The proposal would transform the corporate income tax into a consumption tax, under which goods and services destined for domestic consumption (including imports) are taxed, interest payments are no longer deductible, and goods and services destined for other countries (exports) are not taxed. One objective is to raise revenue by taxing imports and using the revenues to reduce corporate tax rates to 20%; another objective is to remove the incentive for corporate inversions (moving overseas) because taxation would be based on where goods and services are consumed, not where they are produced.
- Restructure the IRS around three major units: one for individuals and families, one for businesses of all sizes, and one that provides an independent “small claims court” approach to resolving routine disputes quickly.
- Creating an Office of Dispute Resolution. (Note: IRS already has a Taxpayer Advocate Service)
Tax Reform Plans:
- 2017 GOP Unified Framework for Fixing our Broken Tax Code
- 2016 House GOP Tax Plan
- TPC analysis of House Plan
- 2016 Trump Tax Plan: Highlights (as outlined in speeches on August 8, Sept. 13 and Sept. 15)
- TPC analysis of Trump Tax Plan
- CRS: An Overview of Recent Tax Reform Proposals
- 2015: Senate Finance Committee bipartisan working groups on tax reform
- The Business Income Bipartisan Tax Working Group Report
- The Community Development & Infrastructure Bipartisan Tax Working Group Report
- The Individual Tax Bipartisan Tax Working Group Report
- The International Tax Bipartisan Tax Working Group Report
- The Savings & Investment Bipartisan Tax Working Group Report
- 2014: JCT: Technical Explanation of the Tax Reform Act of 2014
Major Reports / Releases on Tax Reform
- 2017: CBO Report on Tax Revenues and Corporate Inversions
- 2017: Border Adjusted Consumption Taxes
- 2017: An Overview of Recent Tax Reform Proposals
- TPC 2016 Analysis of Trump Tax Plan
- TPC 2016 Analysis of House GOP Tax Plan
- 2017 Brookings Analysis of the Border Adjustment Tax
- 2016 CRS report on U.S. International Corporate Taxation
- CRS Child Tax Credit Jan 2016
- JCT: Tax Provisions Expiring in 2017
- Tax Reform Proposals in the 114th Congres (2015-16)
- 2016 report on Corporate Expatriation, Inversions, and Mergers
- Candidate Trump’s Tax Proposals in his August 8, 2016 Address
- House GOP Tax Reform Plan released on June 24, 2016
- 2015 CRS report on Reform of U.S. International Taxation — Alternatives
- CRS State and Local Tax Deduction Sept 2015
- 2015 CRS report on Corporate Tax Base Erosion and Profit Shifting (BEPS) — An Examination of the Data
- 2015 CRS report on Tax Havens International Tax Avoidance and Evasion
- 2014 CRS report on The Corporate Income Tax System — Overview and Options for Reform
- 2014 CRS report on International Corporate Tax Rate Comparisons and Policy Implications
- 2013 GAO report finding that profitable corporations paid an effective rate of only 12.6% in 2010 due to credits, exemptions, and offshore tax havens.
- 2012 CRS report: Taxes and the Economy – An Economic Analysis of the Top Tax Rates Since 1945