Document Type
Thesis
First Faculty Advisor
Dr. Tim Krumwiede
Second Faculty Advisor
Dr. Dennis Bline
Keywords
TCJA; itemized deductions; standard deduction; tax policy; progressivity
Publisher
Bryant University
Rights Management
CC - BY
Abstract
The Tax Cuts and Jobs Act (TCJA) of 2017 introduced significant changes to itemized deductions and the standard deduction, impacting taxpayers across income levels. This study utilizes data from the Statistics of Income to examine changes in tax progressivity and vertical tax equity between 2017 and 2020. The analysis finds that higher-income earners retained a considerably greater benefit from itemizing under the TCJA, indicating a decrease in progressivity post-2017. These results suggest a widening disparity in the tax benefit distribution of itemized deductions, as lower-income groups benefited less from itemizing. The study's insights provide a basis for policymakers as they consider future reforms ahead of the TCJA's scheduled sunset in 2025.
Comments
This work was conducted in the context of the United States tax landscape following the implementation of the Tax Cuts and Jobs Act (TCJA) of 2017. It builds on prior research analyzing the effects of tax policy changes on income distribution and equity, with a focus on the TCJA's impact on itemized deductions and taxpayer behavior.