The Tax Cuts and Jobs Act: An Appraisal

Nigel Chalk, Michael Keen and Victoria Perry

No 2018/185, IMF Working Papers from International Monetary Fund

Abstract: This paper assesses the landmark Tax Cuts and Jobs Act (TCJA), from the perspective of both the U.S. itself and the wider world. The reform has many positive aspects including steps to broaden the base of, and reduce marginal rates under, the personal income tax (PIT), reduce distortions to investment and financing decisions, and mitigate outward profit shifting. But the TCJA has a large fiscal price tag and leaves significant uncertainty as to how the U.S. tax system will develop. The PIT changes could have better targeted relief at low earners, and there is scope to more fully address distortions in business taxation. The novel international provisions create a complex array of both positive and negative international spillovers, and have the potential to significantly reshape the wider international tax system.

Keywords: WP; income tax; tax revenue; tax system; tax liability; taxable income; Tax Policy; Business Tax; Personal Income Tax; International Taxation; Pass-throughs; standard deduction; GILTI income; net effect; rate of return; cash flow; multinational company; business income; U.S corporation; GILTI provision; intangible income; Personal income; Corporate income tax; Income tax systems; Income and capital gains taxes; Global (search for similar items in EconPapers)
Pages: 48
Date: 2018-08-07
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Citations: View citations in EconPapers (8)

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