The Tax Cuts and Jobs Act (TCJA) of 2017, enacted during the presidency of Donald Trump, introduced significant changes to the U.S. tax code, including reductions in individual and corporate income tax rates, and increases in the standard deductions. However, many of these provisions are scheduled to expire at the end of 2025. Currently, Congress, led by Republicans, is debating legislation to extend or make these tax cuts permanent. Proposals include new tax exemptions, such as the elimination of taxes on tips and Social Security benefits, and deductions for auto loans. Nevertheless, funding these extensions presents significant challenges, as they are estimated to potentially increase the federal deficit by up to $5 trillion over the next decade. To offset these costs, cuts to programs like Medicaid and the elimination of incentives for green energy are being considered. Additionally, within the Republican Party, a debate has emerged regarding the possibility of increasing taxes on incomes over $1 million annually, although prominent figures strongly oppose this idea. The final decision on the extension of the TCJA will depend on negotiations in Congress and the current administration's fiscal priorities.
