#TrumpTaxCuts
The Trump Tax Cuts, officially known as the Tax Cuts and Jobs Act (TCJA), were enacted in 2017 and are set to expire in 2025. Here's what's happening with the Trump Tax Cuts:
Key Provisions
- *Individual Income Tax Cuts*: The TCJA reduced tax rates for individuals, nearly doubling the standard deduction and limiting state and local tax (SALT) deductions.
- *Corporate Tax Cuts*: The TCJA reduced the corporate tax rate and improved capital investment deductions.
- *Expiration Dates*: Most individual tax cuts expire in 2025, while business tax cuts expire in 2028.
Proposed Extensions and Changes
- *Permanent Extension*: President Trump has called for permanent extension of the 2017 tax cuts, along with additional policies like no taxes on tips, overtime pay, and Social Security benefits for retirees.
- *New Tariffs*: Trump has also proposed new tariffs on US imports, which could offset some of the economic benefits of the tax cuts.
Economic Impact
- *GDP Growth*: Extending the TCJA could increase long-run GDP by 1.1%, but most benefits would go to high-income individuals.
- *Deficit Increase*: Extending the TCJA would decrease federal tax revenue by $4.5 trillion from 2025 to 2034, increasing the budget deficit ¹ ².
Budget Reconciliation Process
- *House and Senate Resolutions*: The House and Senate have passed budget resolutions to start the reconciliation process, which allows for fast-tracked tax and spending changes.
- *Deficit-Financed Tax Cuts*: The budget resolutions allow for up to $5.3 trillion in deficit-financed tax cuts ¹.