Regardless of who wins in November, a major tax overhaul is coming.
Regardless of who wins November’s election, one thing is a near certainty: the person in the White House must get a major new tax law passed next year, before many parts of the 2017 Trump tax cuts are set to expire.
Given the likelihood that Congress will be split when either Donald Trump or Kamala Harris takes the oath of office next January, it’s plausible that a big tax overhaul becomes one of the few pieces of major legislation to actually pass in either administration’s first year.
It’s why, when the candidates are outlining their tax agendas, voters should pay attention.
“There is no question that tax legislation will be top of mind for Congress and the next president in 2025”, Caroline Bruckner, the managing director of the Kogod Tax Policy Center, told Newsweek. “With the looming expiration of the Trump tax cuts, both parties will have to come together to find a deal or face the voters’ wrath.”
It’s been almost seven years since Trump signed into law one of the most sweeping tax overhauls in decades, officially known as the Tax Cuts and Jobs Act of 2017 (TCJA). By the end of 2025, Congress will have to decide which of the tax cut provisions in the TCJA to keep, end or expand. The $1.5 trillion tax bill included significant tax cuts for both corporations and individuals, although they largely benefitted wealthier Americans and large businesses.
Ahead of November’s election, both candidates have laid out their plans for a tax overhaul.Trump’s Tax Plan
If elected, Trump has said he plans to extend his tax cuts and go even further by eliminating taxes on tips and Social Security benefits and by cutting the corporate tax rate again, dropping it from 21 percent to 15 percent. Before the TCJA, the corporate tax rate was 35 percent.
But Joann Weiner, a former senior economist with the U.S. Treasury Department’s Office of Tax Policy, told Newsweek that it’s not clear Congress will go along with his plans for another corporate tax cut. Trump has argued that slashing those taxes would give businesses more money to grow and hire, but the nonpartisan Penn Wharton Budget Model estimates that Trump’s plan would adding $5.
