President Donald Trump, on 22 December 2017, signed tax reform legislation (Public Law [P.L.] No. 115-97) that lowered business and individual tax rates, modernised United States (US) international tax rules, and provided the most significant overhaul of the US tax code in more than 30 years. P.L. 115-97 temporarily reduced the current 39.6% top individual income tax rate to 37% and revised other individual income tax rates and brackets, effective for tax years beginning after 31 December 2017.
P.L. 115-97 retained a modified individual alternative minimum tax (AMT) with higher exemption amounts and phase-out thresholds. P.L. 115-97 included a broad range of tax reform proposals affecting businesses and individuals, including a new 20% deduction for certain pass-through business income (new Section 199A of the Code). In addition, P.L. 115-97 repealed or modified many tax provisions to offset part of the cost of the tax reforms. The Joint Committee on Taxation (JCT) staff estimated that the net revenue effect of P.L. 115-97 will be to increase the on-budget federal deficit by 1.456 United States dollars (USD) trillion over ten years.