#TrumpTaxCuts The Trump tax cuts, officially known as the Tax Cuts and Jobs Act (TCJA), were enacted in 2017 and are set to expire at the end of 2025. Here's what's happening with the tax cuts:
Key Provisions
- *Individual Tax Cuts*: The TCJA reduced tax rates for individuals, doubled the standard deduction, and expanded family tax credits. However, it also limited deductions for state and local income taxes (SALT) and property taxes.
- *Corporate Tax Cuts*: The TCJA reduced the corporate tax rate from 35% to 21%, aiming to boost capital investment and economic growth.
- *Expiration*: If not extended, the TCJA's individual provisions will expire, potentially leading to a significant tax hike for many Americans.
Potential Impact of Expiration
- *Tax Increase*: Without extension, the average taxpayer could face a 22% tax hike, with a typical family of four seeing a $1,700 increase.
- *Economic Impact*: The expiration could lead to reduced economic growth, lower wages, and job losses.
President Trump's Proposal
- *Permanence*: Trump has called for making the TCJA's provisions permanent, along with additional tax cuts, such as exempting tips and Social Security benefits from taxation.
- *Tariffs*: Trump's proposal also includes new tariffs on imports, which could offset some of the economic benefits of the tax cuts.
Budget Reconciliation Process
- *Legislative Process*: The budget reconciliation process allows lawmakers to pass tax reforms with a simple majority in the Senate, bypassing the filibuster.
- *Deficit Impact*: Extending the TCJA could increase the budget deficit by $4.5 trillion over the next decade, according to the Tax Foundation