The Tax Cut and Jobs Act (TCJA) will reduce individual income taxes on average for all income groups and in all states. Unlike prior Tax Policy Center reports, this analysis focuses on the distribution of the individual income tax changes, and does not include changes in the corporate income tax, excise taxes, or estate and gift taxes. It also extends the analysis to include the distribution of the individual income tax changes across the states. We estimate that in 2018, the TCJA will cut individual income taxes for 65 percent of households overall, but raise taxes for about 6 percent of households. Only 27 percent of households in the lowest income-quintile will receive a tax cut (or an increase in their tax refund), with most having no material change in their taxes. The individual income tax cuts as a percentage of after-tax income will be largest for high-income households, particularly those in the 95th to 99th percentile of the income distribution. We estimate that between 60 and 76 percent of taxpayers in every state will receive a tax cut. The individual income tax cut will average about 1.8 percent of after-tax income across all states, exceed 2.1 percent of after-tax income in seven states, and fall below 1.5 percent of after-tax income in California, New York, and Oregon.
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