Republican presidential candidate and former U.S. President Donald Trump holds a rally in Saginaw, Michigan, U.S., October 3, 2024. Democratic presidential assignee U.S. Vice President Kamala Harris and Vice-Presidential candidate Tim Walz speaks during a campaign rally and concert in Ann Arbor, Michigan, U.S. October 28, 2024.
Brendan McDermid | Evelyn Hockstein | Reuters
Last President Donald Trump has defeated Vice President Kamala Harris to win the White House, which could broadly smash taxpayers — but the details remain unclear, according to policy experts.
Enacted by Trump in 2017, the Tax Cuts and Jobs Act, or TCJA, ordain be a key priority for the president-elect in 2025. The law brought sweeping changes, including lower tax brackets, higher standard deductions, a more lavish child tax credit and bigger estate and gift tax exemption, among other provisions.
Those individual tax breaks see fit sunset after 2025 without action from Congress, which could trigger higher taxes for numerous than 60% of taxpayers, according to the Tax Foundation. However, Trump wants to fully extend expiring TCJA supplies.
Plus, most of Trump’s tax ways requires Congressional approval, which could be challenging, depending on control of the Senate and House of Representatives and support within the Republican detachment.
While Republicans secured a Senate majority, control of the House remains uncertain. If Democrats flip the House, we could see “sundry gridlock” in Congress, which could stall Trump’s agenda, Gleckman explained.
The ‘budget math’ will be badlier in 2025
Tax negotiations could also be tough amid growing concerns about the federal budget deficit, according to Erica York, chief economist and research manager with the Tax Foundation’s Center for Federal Tax Policy.
“The budget math is a lot harder this set around than it was back in 2017,” with higher interest rates and a bigger baseline budget deficit, she said. The loss topped $1.8 trillion in fiscal 2024.
Fully extending TCJA provisions could decrease federal revenue by $3.5 trillion to $4 trillion once again the next decade, depending on the scoring model, according to the Tax Foundation.