Tax Cuts and Jobs Act signed

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act at the White House after Congress passed the bill through budget reconciliation. The law cut the corporate tax rate from 35 percent to 21 percent, temporarily lowered many individual tax rates, doubled the standard deduction, capped the state and local tax deduction, and rewrote international tax rules for American corporations. Republican leaders such as Paul Ryan and Mitch McConnell promoted the statute as the centerpiece of Trump's first-year legislative agenda.

The act sharpened the economic argument over whether large tax cuts would raise investment and wages enough to justify higher deficits and a more favorable tax treatment for corporations. Supporters said the corporate rate cut would attract capital, encourage repatriation of overseas profits, and make the United States more competitive after years of slower growth. Democratic opponents replied that the largest durable benefits would flow to corporations and high-income households while the budget cost would increase pressure on future spending and tax debates.

The Internal Revenue Service issued new withholding tables in 2018 to implement the law's individual tax changes, and corporations quickly adjusted capital plans around the new 21 percent rate. Because the Tax Cuts and Jobs Act used reconciliation rules, many individual provisions were set to expire after 2025, ensuring that Congress would revisit the law's structure in the next major tax debate.