A coalition of fiscal watchdog groups are warning that President Donald Trump’s signature first-term tax plan must be renewed to avoid serious financial consequences for New England families.

Not renewing the tax law before many of its provisions expire at the end of the year will cost taxpayers thousands of dollars each year, according to representatives from Americans for Prosperity, Americans for Tax Reform, the Josiah Bartlett Center for Public Policy, the Maine Policy Institute, the Rhode Island Center for Freedom and Prosperity, the Yankee Institute, and the Massachusetts Fiscal Alliance.

In Massachusetts alone, according to MassFiscal executive director Paul Craney, taxpayers would see their annual tax bills go up by an average of $4,656 per family, and businesses would see an increase of $2,031. Those costs, according to Craney, would come along with almost 29,000 Bay State job losses.

“Federal and state taxes are already high and eating away at the paychecks of Massachusetts workers,” Craney said. “Massachusetts is already a high-cost state, and the inflation of the last four years really shrunk a lot of workers’ paychecks. Adding a massive tax hike by not renewing an important tax cut will only hurt workers, hurt small businesses, investment, and economic growth. It would also make us the highest taxed New England state.”

The groups are calling on New England’s congressional representatives to act before the Tax Cuts and Jobs Act reaches its sunset point on Dec. 31.

The TCJA — passed by a Republican controlled Congress in 2017 and signed into law by the 45th President — lowered the tax rate for five of the seven individual income tax brackets. The top rate fell from 39.6% to 37%, the third bracket dropped to 32% from 33%, the 28% bracket fell to 24%, the 25% bracket to 22%, and the 15% bracket to 12%, while the lowest bracket remained at 10%, and the 35% bracket, the second highest, went unchanged.

The law also raised the standard deduction. For the tax year ending this December, the single filer deduction is set at $15,000, while the married filing jointly deduction is set at $30,000. Before the law was passed the single deduction was $6,350 and the married filing jointly deduction was $12,700.

To avoid going backwards and upping the tax burden of every Bay State resident, Craney says the commonwealth’s congressional delegation must set aside their party’s interests and focus on their constituents.

“As our friends at Citizens for Limited Taxation used to say, every tax cut is a pay raise and Massachusetts Members of Congress have an opportunity to ensure Massachusetts taxpayers get to keep their pay raises. This decision is completely on them, and everyone will be watching to see if they put partisan politics ahead of the people of Massachusetts,” Craney said.

The members of the coalition are aware that their calls may fall on ideologically deafened ears, they said in answer to questions from reporters during a press call held Tuesday. Still, Craney said, they wanted to put the politicians representing the New England states on notice about the impact the law’s expiration will have on voters.

“A whole percentage point of GDP will be consumed by the federal government if this tax increase happens, which will lead to lower economic growth, which will hurt the entire economy, which will make all Americans poorer. We do not want to go down that road. That would be bad for everyone,” said Drew Cline, president of the Josiah Bartlett Center for Public Policy.

According to the non-partisan Tax Policy Center, renewing Trump’s tax bill would “decrease federal tax revenue by $4.5 trillion from 2025 through 2034,” while “long-run GDP” would grow by just 1.1%. This GDP growth would offset $710 billion — about 16% — of the revenue loss, while “long-run GNP (a measure of American incomes)” would only rise by 0.4%.

“Some of the benefits of the tax cuts and larger economy go to foreigners in the form of higher interest payments on the debt,” they wrote.

An Oxford University study released in May of 2024 found the TCJA led to mixed results, in that, by reducing corporate tax rates, the government “may boost investment, raise shareholders’ returns, and increase workers’ earnings,” but by and large the benefits of those cuts go to the wealthy and “may be distributed unevenly throughout the economy.”

According to the study authors, their main findings were that the tax cuts “led to efficiency gains in the economy, as firms receiving larger tax cuts were more likely to increase their investment, labor demand, and profits,” but nevertheless “also led to an increase in inequality, with roughly half of the gains from the tax cuts flowing to corporate shareholders, and the other half flowing to highly paid workers and executives.”

“Overall, we interpret these results as evidence that policymakers face an efficiency-equity tradeoff when setting corporate tax policy,” they wrote.

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