ALEC Legislator Letter: Permanently Extending the Tax Cuts and Jobs Act of 2017

To: 119th United States Congress

From: The American Legislative Exchange Council and Members of the State Legislatures

Dear Members of the 119th United States Congress

On December 31, 2025, several key provisions of the Tax Cuts and Jobs Act of 2017 are set to expire that have helped to increase the productivity of the American economy and allowed the American taxpayer to keep more of their hard-earned income. Extending the provisions of this monumental tax cut are crucial to protecting the American taxpayer, enhancing economic growth, and keeping the country competitive on a global stage.

Prior to the government-mandated economic shutdowns during the COVID-19 pandemic and the disastrous inflation due to out-of-control federal spending, the Tax Cuts and Jobs Act of 2017 spurred steady economic expansion and allowed the spirit of entrepreneurship to flourish, while creating new jobs and opportunities for millions of Americans. The 2017 tax cuts reduced federal tax rates for households across every income level, resulting in a tax cut of more than $1,500 for the average middle-income earner. The $1.5 trillion net tax cut was followed by historically low unemployment rates, an increase in business investment, and a $6,000 increase in real median household income over two years – which included scores of raises and bonuses for workers immediately after the 2017 tax cuts were adopted. More than 100 million American taxpayers from all income groups, but especially middle- and working-class American taxpayers, have enjoyed real tax relief at the federal and state level due to the Tax Cuts and Jobs Act.

There are 23 provisions of the 2017 tax cuts directly relating to individual income taxes, such as the reductions in personal income tax rates, the near doubling of the standard deduction, and the substantial reduction of the hated Alternative Minimum Tax (AMT), that will expire after December 31, 2025.

If the provisions of the Tax Cuts and Jobs Act are allowed to expire, the federal tax base will once again be narrowed because the cap on the state and local tax (SALT) deduction would be eliminated. The return to an unlimited SALT deduction would be an incentive for many states to implement higher taxes and spend at higher levels under the guise of lowering the federal tax burden – a responsibility that ultimately lies with Congress. Maintaining a cap on the SALT deduction would keep the federal tax base broad.

Furthermore, state level conformity with the federal tax code resulted in lower state tax burdens for many Americans as states saw revenue booms in the wake of conformity that led to surpluses and, ultimately, tax relief.

A majority of Americans support making the Tax Cuts and Jobs Act of 2017 permanent. Allowing it to expire would result in a massive tax increase on hardworking American taxpayers, a significant decline in American competitiveness, fewer jobs, reduced wage income for workers, and higher prices.

The American Legislative Exchange Council and the undersigned state lawmakers believe allowing these essential tax relief provisions to expire would harm hardworking American taxpayers, slow the growth of the U.S. economy, and further reduce America’s ability to compete on a global stage.

Signed,

Former State Legislators