The magnitude of these increases is extremely difficult to predict. A range of estimates suggests that the law is likely to contribute to increased US capital investment and, through that, an increase in US wages. The discussion then turns the main changes of the Tax Cuts and Jobs Act of 2017 for the corporate income tax.
It compares US corporate tax rates to other countries before the 2017 tax law, and describes ways in which the US corporate sector has evolved that are especially relevant to tax policy. This paper seeks to evaluate the impact of the Tax Cuts and Jobs Act to understand its effects on resource allocation and distribution. Beginning in 2018, the federal corporate tax rate fell from 35 percent to 21 percent, some investment qualified for immediate deduction as an expense, and multinational corporations faced a substantially modified treatment of their activities.
However, perhaps none was as important as the changes in the treatment of traditional “C” corporations-those corporations subject to a separate corporate income tax. The law introduced many significant changes. On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (TCJA), the most sweeping revision of US tax law since the Tax Reform Act of 1986.
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