#TrumpTaxCuts The Trump tax cuts, initially enacted in 2017, have been a focal point of ongoing political debate, particularly regarding their potential extension and impact on taxpayers. Recent discussions highlight proposals for substantial tax reductions, especially for individuals earning under $200,000, while concerns about their long-term fiscal implications persist.

**Current Legislative Context**

- The House budget resolution allows for a **$4.5 trillion increase** in the deficit from tax cuts over the next decade, contingent on cutting spending by **$1.7 trillion**.

- If spending cuts do not meet this threshold, the cap on tax cuts will be reduced dollar-for-dollar. Conversely, exceeding the spending cuts could increase the cap on tax cuts.

- The Senate has approved a budget resolution that does not permit any tax cuts, focusing instead on revising numbers using a current tax policy baseline.

**Economic Implications of Extending Tax Cuts**

- A report from the Council of Economic Advisers suggests that extending the Trump Tax Cuts could lead to:

- An increase in real wages by up to **$3,300/year**.

- A potential rise in take-home pay for median-income households by **$5,000/year**.

- A boost in short-run real GDP by **3.3-3.8%** and long-run real GDP by **2.6-3.2%**.

- Preservation of **4.1 million jobs**.

- An influx of **$100 billion** in investment for distressed communities.

**Consequences of Non-Extension**

- If Congress fails to extend the Trump Tax Cuts, taxpayers could face:

- An average **22% tax hike**, amounting to approximately **$4 trillion**.

- A **$1,700 tax increase** for the average family of four.

- A reduction in the Child Tax Credit for **40 million families**.

- A significant tax increase for **26 million small businesses**.

**Proposals for Future Tax Policy**

- President Trump has called for the permanence of the 2017 tax law, including:

- Restoration of the state and local tax (SALT) deduction.

- Reduction of the corporate tax rate for domestic production.