#TrumptaxCuts

Extending the Tax Cuts and Jobs Act of 2017 (TCJA) that is set to expire will reduce federal tax revenue by $4.5 trillion from 2025 to 2034. Long-term GDP will be higher by 1.1 percent, offsetting revenue losses of $710 billion, or 16 percent. Long-term GNP (a measure of American income) will only rise by 0.4 percent, as some benefits from tax cuts and a larger economy flow to foreigners in the form of higher interest payments on debt.

President Trump has called for a permanent extension of the 2017 tax cuts, additional policies—including no tax on tips, overtime pay, and Social Security benefits for retirees—as well as the creation of deductions for interest on car loans for American-made cars. He has also promised to increase taxes on U.S. imports through a series of new tariffs.

Lawmakers will use the budget reconciliation process to enact new tax cuts. Reconciliation is a fast-track option that addresses Senate filibuster and can be used to enact changes to taxes, spending, and debt limits outlined in a budget resolution with specific targets or limits for deficit changes within the budget window.