A new study from the Council of Economic Advisers (CEA) confirms what working families and small business owners have long known: the 2017 Trump tax cuts delivered results, and Congress must act to make them permanent. In response to CEA’s analysis, House Ways and Means Chairman Jason Smith (MO-08) stressed the urgency for Congress to act now to lock in the pro-growth policies of President Trump’s successful tax cuts:

“Extending Trump’s tax cuts means a stronger economy, saved jobs, and higher wages according to this latest economic study. We will save over 6 million full-time jobs and raise take-home pay for working families by up to $5,000. Congress has an opportunity to lock in the most pro-worker, pro-growth tax policy in a generation that will keep businesses hiring and help rural Americans thrive. We cannot afford to wait until the last minute. Americans need certainty today that their tax rates won’t go up next year.”

The CEA report emphasizes the important pro-growth effects that extending the Trump tax cuts will bring to American workers and small businesses:

• Boost the level of short-run real gross domestic product (GDP) by 3.3 to 3.8 percent and long-run real GDP by 2.6 to 3.2 percent.
• Raise annual real wages by $2,100 to $3,300 per worker.
• Increase real annual take-home pay for a median-income household with two children by roughly $4,000 to $5,000.
• Facilitate $100 billion of investment in distressed communities through Opportunity Zones.

Read the report here.

Prior to passage of the Trump tax cuts, CEA accurately predicted they would grow the economy and increase real wages. By contrast, the Congressional Budget Office (CBO) underestimated their economic impact, missing by a full percentage point in 2018 and 2019. And in the five years following the Trump Tax Cuts, tax revenues came in $170 billion per year above CBO’s post-2017 projections.

Read: Once Again, CBO Stacks the Deck Against Tax Relief for American Families and Workers

Extending the Trump Tax Cuts
Restoring and extending the 2017 Trump tax cuts will fuel significant economic growth and prosperity. 

• 1 million new jobs created by small businesses if the 20 percent small business deduction is made permanent. 
• $150 billion in economic growth from permanent extension of the 20 percent small business deduction.
• $284 billion of new economic growth from American manufacturers

Key Policies from the Trump Tax Cuts Set to Expire if Congress Fails to Act:

• 6 million jobs will be lost if the tax cuts are not extended.
• The average taxpayer would see a 22 percent tax hike if the Trump tax cuts expire.
• A family of four making $80,610, the median income in the United States, would see a $1,695 tax increase if the Trump tax cuts expire.
  • This is worth about 9 weeks of groceries to a typical family of four across the country.
• 40 million families would see their household’s Child Tax Credit cut in half.
• 91 percent of all taxpayers would see their guaranteed deduction slashed in half. 
• 26 million small businesses would be hit with a 43.4 percent top tax rate if the Section 199A Small Business Deduction expires.
• 7 million taxpayers would be impacted by the return of the Alternative Minimum Tax.
• 2 million family-owned farms would have their Death Tax Exemption slashed in half next year.