President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE signed his much-anticipated tax overhaul bill into law on Dec. 22, 2017. One year later, it has fallen short of GOP expectations on several fronts.

Politically, the tax-cut law was expected to help at the polls, where House Republicans ended up losing their majority during the November midterm elections.

ADVERTISEMENT

Republicans had hoped the law would become more popular after the IRS updated its withholding tables in early 2018, but polls consistently showed that many taxpayers either didn’t notice more money in their paychecks or they thought the tax cuts benefited corporations and wealthy Americans more than everyone else.

The next key test for the law will come early next year, when taxpayers start filing their returns under the new code for the first time. Republicans are hopeful that’s when voters will view the law in a new, more positive light.

“I think come January through April, they’re going to see tangible tax relief,” said Rep. Kevin Brady Kevin Patrick BradyBusinesses, states pass on Trump payroll tax deferral Trump order on drug prices faces long road to finish line On The Money: US deficit hits trillion amid pandemic | McConnell: Chance for relief deal 'doesn't look that good' | House employees won't have payroll taxes deferred MORE (R-Texas), the outgoing chairman of the tax-writing Ways and Means Committee.

Democrats, on the other hand, are worried that some taxpayers who are expecting refunds will end up owing money, or that they will receive smaller refunds than they budgeted for.

“It’s going to be a hit and a surprise to a lot of them,” said Rep. John Larson John Barry LarsonAARP endorses Democrats' measure to overturn Trump payroll tax deferral GAO clears way for Democrats to try to overturn Trump's payroll tax deferral Trump payroll-tax deferral for federal workers sparks backlash MORE (D-Conn.), a member of the Ways and Means panel.

The tax law is considered the GOP’s signature legislative accomplishment during the first two years of Trump’s presidency. Its main provisions include lower tax rates across-the-board for individuals, slashing the corporate tax rate from 35 percent to 21 percent and a 20 percent deduction for income from noncorporate businesses.

ADVERTISEMENT

Republicans last year touted the overhaul as a middle-class tax cut that would boost the U.S. economy. They have also argued that the tax cuts will pay for themselves.

Economists across the political spectrum disagree with the notion that the tax cuts won't add to the deficit, and the federal deficit has increased since the law’s passage.

The nonpartisan Congressional Budget Office estimated in April that the law will add about $1.9 trillion to the deficit from 2018 to 2028.

Chuck Marr, director of federal tax policy at the left-leaning Center on Budget and Policy Priorities, said that from a fiscal perspective, the tax law was a “major mistake.”

Economic growth has been strong in 2018, and is on track to hit Republicans’ desired goal of 3 percent for the year.

"Tax cuts and regulatory relief actions by the Trump Administration have led to more investment in America, strong economic growth, higher wages, and more Americans going back to work," Treasury Secretary Steven Mnuchin Steven Terner MnuchinHillicon Valley: DOJ proposes tech liability shield reform to Congress | Treasury sanctions individuals, groups tied to Russian malign influence activities | House Republican introduces bill to set standards for self-driving cars Treasury: Trump's payroll tax deferral won't hurt Social Security Treasury sanctions individuals, groups tied to Russian malign influence activities MORE said in a statement Friday.

Business groups that pushed for the tax-cut law continue to argue it has been beneficial to the economy.

“From the beginning, the Chamber said it would judge any tax reform plan on whether or not it would spur economic growth and benefit the American people,” said Caroline Harris, vice president for tax policy and economic development at the U.S. Chamber of Commerce. “Based on that standard, tax reform is working.”

But it’s unclear whether the law will provide a long-term benefit to the economy.

White House Council of Economic Advisers Chairman Kevin Hassett said on a call with reporters this week that the tax law is meeting the administration’s economic expectations, and he thinks growth will be sustained.

“The people who said we couldn't have 3 percent growth last year are saying it about next year, and I think that they're as incorrect now as they were last year,” he said.

The Federal Reserve estimates growth will fall below 3 percent next year.

“I think we should expect the economy will slow. The question is, to what?” said Douglas Holtz-Eakin, president of the right-leaning American Action Forum.

He said the question is whether growth rates will return to their pre-tax law levels or slow more modestly.

Democrats have highlighted that corporations spent more money in the past year on repurchasing their own shares than on wage increases and bonuses for employees.

But analysts who are supportive of the law say it will take time for the tax cuts to show up as increased productivity and higher wages.

While the long-term economic effects remain to be seen, it’s clear the tax cuts weren't the political asset that Republicans hoped they would be in the 2018 midterm elections.

While most people in all income groups are expected to receive a tax cut for their 2018 income under the law, higher earners are expected to see the greatest increases in their after-tax incomes. Democrats and progressive groups have hammered home that point.

“We demonstrated that when people were shown what the tax bill did, they recognized it for what it was and they did not fall for the GOP spin,” said Maura Quint, executive director of Tax March.

Republicans are hopeful that voters will ultimately warm to the tax law when they file their taxes next year. Most of the law’s changes to the tax code for individuals take effect for the 2018 tax year, with the filing season on tap for early 2019.

Democrats, on the other hand, say they are worried taxpayers will receive an unwelcome surprise and have to pay the IRS money in the spring, due to the new withholding guidance and the fact that many people didn’t update their withholding this year.

A group of Democrats on the House Ways and Means Committee introduced a bill last week that would protect taxpayers from penalties next year if they did not have enough taxes withheld from their paychecks.

The Treasury Department has estimated that under the new withholding guidance, 73 percent of taxpayers with wages will get refunds next year, compared to 76 percent if prior laws had still been in place.

A survey by H&R Block found that 47 percent of respondents think they will see bigger refunds next year.

“In aggregate, we expect that people’s tax rates are going down, their tax liabilities are going down, but how that manifests in tax refunds will be very specific to one’s individual circumstances,” said Kathy Pickering, executive director of H&R Block’s tax institute.

Pickering said the taxpayers most at risk for having decreased refunds next year are homeowners in high-tax states, those with unreimbursed business expenses and people who itemize deductions and don’t have dependents.

In the coming year, House Democrats plan to hold hearings on the tax law, but they're unlikely to get any rollback legislation through the GOP-controlled Senate.

And Democratic presidential candidates for 2020 are likely to propose eliminating parts of the law to show how they would pay for their various domestic policy proposals.

“I think that taxes are going to be very big in the presidential campaign,” said Frank Clemente, executive director of Americans for Tax Fairness.