WASHINGTON, D.C. – A new Tax Foundation analysis shows that the Working Families Tax Cuts will deliver a more prosperous economy, noting that “permanent extension of lower marginal tax rates on work, saving, and investment lays a solid foundation for stronger economic growth.” The Trump economy “has substantially outperformed most forecasters expectations over the last year.” The report closes noting that “the extension of pro-growth tax cuts put the economy on a sound footing.”

The findings that pro-growth tax cuts are poised to further boost GDP, wages, and jobs accompany a separate new upward revision from the Bureau of Economic Analysis showing third-quarter 2025 GDP grew at a robust 4.4 percent annualized rate—surpassing expectations and marking the fastest pace in two years.

Ways and Means Committee Chairman Jason Smith (MO-08) said:

“This rapid uptick in economic strength is proof that passing the Working Families Tax Cuts last July empowered workers, families, farmers, and small businesses, including manufacturers, to plan for growth knowing the largest tax cut in history was coming their way. These tax cuts will unleash more investment, higher wages, and a surge of new jobs, and every year they’re in effect results in additional economic growth. In fact, third quarter economic growth was already better than forecasts predicted – but the latest revision shows even bigger improvements. Democrats not only voted against these successful tax cuts and this stronger economy, they’re promising to raise taxes across the country.”

Key Highlights:

• The Working Families Tax Cuts’ Projected GDP Boost: The Tax Foundation estimates the Working Families Tax Cuts will increase long-run GDP by 1.2 percent, with short-term gains of 1.2 percent in 2026, 1.4 percent in 2027, and 1.5 percent in 2028 above the Congressional Budget Office’s baseline projections.
  
• Wage and Job Growth: Supply-side effects from lower marginal tax rates, bonus depreciation, pass-through deductions, and new cuts for overtime and tipped workers, and manufacturing expensing are projected to raise wages by 0.4 percent and create the equivalent of 938,000 full-time jobs. Real wages — adjusted for inflation — are rising: workers have seen positive real income growth since January 2025 compared to declines under prior administrations.
  
• Investment and Capital Expansion: The Working Families Tax Cuts are expected to grow the capital stock by 0.7 percent, spurring additional economic activity, more productive workers, and higher wages.
  
• Stronger-Than-Expected Q3 Growth in GDP Revision: Real GDP expanded at an annualized 4.4 percent rate in Q3 2025, revised up from the previous estimate of 4.3 percent, driven by upward adjustments to exports and investment, and partially offset by a slight downward revision to consumer spending. This marks the fastest growth in two years, exceeding economists’ forecasts of 3.3 percent and reflecting robust consumer spending (up 3.5 percent) and a rebound in exports (9.6 percent).

Read: Chairman Smith: One Year In, President Trump Improving the Lives of All Americans