Impact on Tax Revenues

The Tax Cuts and Jobs Act (TCJA) significantly reduced tax revenues, falling short of proponents' claims that it would pay for itself. It is estimated that the reform lowered tax revenues by around 40% over the long term, indicating a substantial fiscal impact. Researchers forecast that while some revenue could be recouped through increased economic activity, the gains would be minor in comparison to the initial cuts. Over ten years, only about 2% of the lost revenue from the reform is likely to be recovered, highlighting the limited effectiveness of the tax cuts in generating sustainable revenue.