The Tax Cuts and Jobs Act (TCJA) of 2017 included numerous individual and business tax provisions scheduled to expire at the end of 2025. Understanding the distributional effects of these expiring provisions is crucial for assessing potential policy changes. Specifically, the termination of these cuts will impact different income groups and business sectors in varying degrees.
The implications of these expirations are significant. Retaining the current tax structure would likely necessitate increased government borrowing, potentially impacting interest rates and future economic growth. Alternatively, allowing the provisions to expire as scheduled would redistribute the tax burden, influencing household income and business investment decisions. The historical context of the TCJA reveals that its primary goal was to stimulate economic growth through tax reductions, particularly for corporations and high-income earners.
