Abstract

The Tax Cuts and Jobs Act (TCJA) of 2017 was one of the biggest adjustments to the U.S. Taxes in a long time. It passed when Donald Trump was president, and its purpose became to develop the economic system, help organizations, and make taxes simpler to recognize. The TCJA reduces taxes for human beings and corporations to inspire funding, create jobs, and grow monetary activity. This research examines how the TCJA affects economic systems nowadays and what it could do in the future. It explains how reducing taxes for organizations, people needs to affect things like the countrywide debt and profits inequality. It also looks at the effect on other nations, and how these tax regulations compare to older U.S. tax policies.    

Introduction

In 2017, the U.S. passed the Tax Cuts and Jobs Act, which promised to bring a major overhaul to the American system President Trump wanted the U.S. to be more competitive, and this was to be done by cutting taxes for individuals and businesses in an attempt to get both groups more in line while also finding some jobs. The idea was that people would spend more if they paid less in taxes, which is how the economy would grow. Although it did introduce some spot-level economic benefits such as growth and activity introduction, there is much controversy surrounding its long-term impact. The gap between the rich and the poor is also expected to widen, presenting a challenge for policymakers in controlling its price range in the future. This research finds out if the TCJA succeeded in doing what it set out to do and what the greater impact is likely. 

Overview of Trump’s economic agenda

The Donald Trump administration’s Tax Cuts and Jobs Act, commonly called the TCJA, enacted in December of 2017, has been considered the biggest tax change since the U.S. Tax System of the 1980s. With three primary objectives: people and businesses’ tax rates, simplifying the tax code, and funding investments further into the United States. TCJA looks forward to helping people and companies succeed. One of the most prominent aspects of Trump’s economy is the temporary boom brought about by tax cuts and additional spending.

Comparing the 2014-2016 period (President Obama’s last three years) with the 2017-2019 period (President Trump’s first three years), results were influenced by various factors with prior trends such as the unemployment rate, which had been declining since 2010. Among the various variables, some like real GDP growth and nominal wage growth showed improvement while others like inflation and real wage growth showed deterioration. Now, in comparison to the January 2017 Congressional Budget Office (CBO) ten-year forecast shortly before Trump’s inauguration, unemployment rates, job growth, and real GDP were all better during 2017-2019.

TCJA under President Trump

The TCJA was one of the most important legislative achievements of the presidency of Trump regarding economic policy. It fits with the kind of vision that has come to define the Trump agenda as “America First,” where the notion is not only to make the U.S. an even more preferable place for businesses but also to decrease tax pressures on middle-class families. It was also framed in the context of reducing tax code complexity and stemming the tide of sheer complexity both individuals and corporations live through. 

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