The Tax Cuts and Jobs Act: An Appraisal

49 Pages Posted: 22 Aug 2018

See all articles by Nigel Chalk

Nigel Chalk

International Monetary Fund (IMF)

Michael Keen

International Monetary Fund (IMF) - Fiscal Affairs Department; CESifo (Center for Economic Studies and Ifo Institute); Institute for Fiscal Studies (IFS)

Victoria J. Perry

International Monetary Fund (IMF)

Date Written: August 2018

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: Tax policy, United States, Western Hemisphere, International taxation, Business Tax, Personal Income Tax, Pass-throughs, General

JEL Classification: E10, E60, F00, H20, H60, E6

Suggested Citation

Chalk, Nigel and Keen, Michael and Perry, Victoria J., The Tax Cuts and Jobs Act: An Appraisal (August 2018). IMF Working Paper No. 18/185. Available at SSRN: https://ssrn.com/abstract=3236801

Nigel Chalk (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Michael Keen

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Victoria J. Perry

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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