US tax reform

Conditions at the time

A major overhaul of corporate and individual taxation proceeded through congressional legislation.

How events unfolded

On 12/22, Public Law 115–97 was enacted, changing corporate tax and numerous other tax-code provisions.

Stakeholders and impacts

US businesses, households, companies with foreign subsidiaries and the IRS were parties to application and tax treatment.

Information available at the time

The law set corporate tax at 21% of taxable income and separately specified effective dates for individual provisions.

Findings confirmed later

Changes in rates, deductions, depreciation and international taxation affect after-tax profits differently by company.

Alternative interpretations and limitations

Enactment differs from application by tax year. Tax cuts do not guarantee greater investment or share repurchases at every company.

Source-based context and interpretation

TCJA changed legal tax conditions. IMF researchers subsequently found investment stronger than pre-reform forecasts but weaker than predictions based on historical tax-cut responses. They emphasized expected demand and assessed how market power could dampen investment sensitivity to tax changes. ASSETCASTING interpretation: Higher after-tax profits differ from new capital formation. Sales prospects and competition matter alongside taxes. The researchers' findings establish neither zero tax effects nor that tax cuts caused all investment growth.

Evidence coverage through 2019-05-31 · Sources checked 2026-10-14

• Public Law 115–97 ↗
• U.S. Investment Since the Tax Cuts and Jobs Act of 2017 ↗

Related events and periods1

• Financial-crisis response and unconventional monetary policy →

  An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.