Impact of the Tax Cuts and Jobs Act on Capital Investment in Publicly Traded United States Manufacturing Firms through 2020

The 2017 Tax Cuts and Jobs Act (TCJA) represents the most significant tax overhaul since the Tax Reform Act of 1986, and one of the most substantial fiscal policies in American history. This paper examines the impact of the TCJA on capital investment in publicly traded U.S. manufacturing firms through 2020. It first outlines the corporate provisions of the TCJA, then delineates three classic theoretical models of how business investment should respond to tax cuts. Finally, this paper evaluates the TCJA's empirical results through three sources. The Albertus et al. paper focuses solely on investment behavior from repatriations, while Kopp et al. and Erkmekjian and Snyder's papers cover the TCJA's overall effects. The exogenous shock had no impact on investment from repatriations, and broader investment growth was muffled; firms instead chose decisive stock market activity to raise share prices.