The Tax Cuts and Jobs Act: An Appraisal

Chalk, Nigel; Keen, Michael; Perry, Victoria

doi:10.5089/9781484372548.001

Cited by 18 publications

(18 citation statements)

References 25 publications

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“…On December 20, 2017, the U.S. Congress adopted a major tax reform, affecting many taxpayers and various taxes, including corporate income, personal income, and estate taxes. Such a sweeping reform clearly has widespread implications for the domestic economy, including its growth and its distribution of income (see Chalk and Keen (2018), IMF (2018), Barro and Furman (2018)). However, in a globalized world, there will also be major spillovers to other economies.…”

Section: Introductionmentioning

confidence: 99%

Tax Spillovers from US Corporate Income Tax Reform

Beer

Klemm²,

Matheson³

2018

IMF Working Papers

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This paper describes, and where possible tentatively quantifies, likely tax spillovers from the U.S. corporate income tax reform that was part of the broader 2017 tax reform. It calculates effective tax rates under various assumptions, showing among other findings, how the interest limitation and the Foreign Derived Intangible Income provision can raise or reduce rates. It tentatively estimates that under constant policies elsewhere, the rate cut will reduce tax revenue from multinationals in other countries by on average 1.6 to 4.5 percent. If other countries react in line with historical reaction functions, the revenue loss from multinationals rises to an average of 5.2 to 13.5 percent. The paper also discusses profit-shifting, real location, and policy reactions from the more complex features of the reform.

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Section: Introductionmentioning

confidence: 99%

Tax Spillovers from US Corporate Income Tax Reform

Beer

Klemm²,

Matheson³

2018

IMF Working Papers

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“…"3 The TCJA allows 100 percent expensing on new investments in assets with less than 20-year depreciable life through 2022, to be reduced by 20 percentage points per year thereafter. For an overview of the TCJA, seeChalk, Keen and Perry (2018).4 This estimated cost incorporates macroeconomic feedback effects, as estimated by the CBO. Without these effects, the estimated static cost is about US$2.3 trillion (CBO 2018).©International Monetary Fund.…”

mentioning

confidence: 99%

U.S. Investment Since the Tax Cuts and Jobs Act of 2017

Kopp¹,

Leigh²,

Mursula³

et al. 2019

IMF Working Papers

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There is no consensus on how strongly the Tax Cuts and Jobs Act (TCJA) has stimulated U.S. private fixed investment. Some argue that the business tax provisions spurred investment by cutting the cost of capital. Others see the TCJA primarily as a windfall for shareholders. We find that U.S. business investment since 2017 has grown strongly compared to pre-TCJA forecasts and that the overriding factor driving it has been the strength of expected aggregate demand. Investment has, so far, fallen short of predictions based on the postwar relation with tax cuts. Model simulations and firm-level data suggest that much of this weaker response reflects a lower sensitivity of investment to tax policy changes in the current environment of greater corporate market power. Economic policy uncertainty in 2018 played a relatively small role in dampening investment growth.

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“…2 For a more detailed description and assessment of the U.S. tax reform, see Chalk, Keen, and Perry (2018).…”

Section: A the 2018 Us Tax Reform And Other Recent Reformsmentioning

confidence: 99%