8 Hospitals, clinics, and social service organizations that rely on public donations may feel the bite of this change. Increases in the personal exemption will make the pocketbook cost of charitable donations higher for middle-income households who no longer benefit from itemizing their deductions. Increases in wages-or in wage inequality-induced by the law might improve or diminish health outcomes. Many of the provisions of the law could have meaningful second-order effects on public health. 4 This commentary assesses the potential impacts of these substantial changes on public health. 6,7 On the basis of the evidence available, the US Congress Joint Committee on Taxation, the government’s official scorekeeper on tax proposals, projects that the law will increase the rate of gross domestic product (GDP) growth by about 0.7% a year through 2027. 5 Skeptics argue that its provisions will have little macroeconomic effect, particularly in today’s robust and growing economy. Proponents of the tax law claim that it will increase the growth of the American economy and raise wages for lower-income workers. To pay for a portion of these and other provisions, the law caps the deduction for state and local taxes at $10 000 and eliminates the individual mandate penalties in the ACA. 4 The law reduces the maximum tax rate on corporate earnings-which, at 35%, had been relatively high compared with those in other high-income countries-to a flat rate of 21%. Among its provisions, it raises the standard individual deduction and the child tax credit and it repeals deductions for personal exemptions together, these provisions will mean that fewer Americans will itemize taxes and claim other deductions (such as those for charitable giving).
The TCJA reduces individual income tax rates for most Americans through 2025, after which most of these provisions expire and rates revert to those that existed prior to the law. 2 To put this in a public health context, the reduction in revenue from the TCJA is about equal in magnitude to earlier estimates of the cost of all the Affordable Care Act’s (ACA’s) coverage expansions (Medicaid and insurance subsidies) over the same period. 1 The law is expected to reduce federal revenues by a total of $1.649 trillion between 20, amounting to a 4% reduction in revenues over the period. 1, the Tax Cuts and Jobs Act (TCJA ), the 12th-largest tax cut (measured as a share of gross domestic product, or GDP) in US history. Late in December 2017, Congress passed-and the president signed-H.R.
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