Passed legislation mandating additional
In 2018, the first year of this tax plan, growth is projected to jump 0.44 percent above the current baseline projection as firms take advantage of the full and immediate expensing of equipment and the lower corporate income tax rate. The initial spike in growth is reduced later during the decade, however, when growth falls slightly below the baseline.
This is due to the temporary nature of many of these provisions.
The first large set of base broadeners is the elimination of a number of credits and deductions for individuals.
Notably, the state and local tax deduction would be limited to a maximum deduction of ,000 for income, sales, and property taxes (except as they are related to business activity), and the mortgage interest deduction would be limited to the first 0,000 in principal value. These provisions would raise 0 billion over the next decade.
A full list of economic effects by provisions is found in Table 5.
The growth of GDP under this plan, however, is not linear.
In 2026, static revenue projections are also above the baseline projections, largely due to the expiration of many individual provisions.On December 15, 2017, a House of Representatives and Senate Conference Committee released a unified version of the Tax Cuts and Jobs Act.This followed passage of the Tax Cuts and Jobs Act by the House of Representatives on November 16, 2017, and by the Senate on December 2, 2017.The corporate tax revenue loss would be most significant in the short term because of the temporary expensing provision for short-lived assets, which would encourage more investment and result in businesses taking larger deductions for capital investments in the first five years of the plan.The figure below compares static and dynamic revenue collection to the current law baseline.