President Biden has vowed to let key provisions of the 2017 Tax Cuts and Jobs Act expire in 2025 if re-elected, which would result in tax increases for millions of Americans.
The TCJA temporarily reduced individual tax rates and nearly doubled the standard deduction.
“Donald Trump was very proud of his $2 trillion tax cut that overwhelmingly benefited the wealthy and biggest corporations and exploded the federal debt,” Biden wrote on X.
“That tax cut is going to expire. If I’m reelected, it’s going to stay expired.”
Allowing it to expire as planned would see rates rise by 1-4% for many taxpayers unless Congress acts.
Biden says he only wants to retain the cuts for those earning less than $400,000 annually.
“If lawmakers allow full expiration to occur, most Americans will see their personal tax bills rise and incentives for working and investing worsen,” stated Erica York, senior economist and research director at the Tax Foundation.
However, making the reductions permanent could add $3.7 trillion to the deficit over a decade.
The expiration is likely to be a major issue in the 2024 election, with Trump promising to maintain the lower rates.
“Though lawmakers may not address the looming expirations this year, they should prepare for the upcoming expiration by weighing the trade-offs of each change the 2017 tax law made,” York said. “Lawmakers should cement into law a tax code that promotes growth and opportunity without worsening U.S. debt.”
Congress will need to address the expirations and weigh their economic and fiscal impacts.
