By Tobias Burns - 04/26/24

Rhetoric is heating up on competing visions for taxes from Democrats and Republicans ahead of the 2024 election, which will determine whether the individual provisions in the 2017 Trump tax cuts are extended, modified or thrown into the legislative dust bin.

President Biden, lawmakers on key tax writing committees, and tax advocates of various ideological stripes are battling over what their agenda should be in 2025, when taxes will return to the limelight of fiscal policy debates.

“Donald Trump was very proud of his $2 trillion tax cut that overwhelmingly benefited the wealthy and biggest corporations and exploded the federal debt. That tax cut is going to expire. If I’m reelected, it’s going to stay expired,” Biden wrote on social media on Wednesday, referring to Trump’s 2017 Tax Cuts and Jobs Act (TCJA), a centerpiece of Republican tax policy.

Trump’s TCJA changed the tax code by cutting the corporate tax rate from 35 to 21 percent and by bringing down individual tax rates by between 0 and 4 percentage points, depending on the tax bracket.

It also increased the standard deduction and the child tax credit (CTC), cut taxes on pass-through entities and international corporate income, and accelerated depreciation write-offs, a provision that has since expired.

Starting in 2026, the individual tax rate reductions in the TCJA will also expire, along with the cap on state and local tax deductions, the boost in the child tax credit, the increase in the standard deduction, the limit on personal exemptions and the repeal of an alternative minimum tax on corporations.

If Republicans can retake the White House and Senate while holding the House, they will have the chance to extend many — if not all — of these expiring provisions. Anything short of a full sweep would force Republicans to negotiate with Democrats, who fiercely oppose much of Trump’s marquee tax law.

Republicans introduced legislation as soon as they retook the lower chamber in 2023 to make the individual and capital gains provisions permanent.

“We need to provide some much-needed relief and certainty to hardworking families and Main Street businesses and ensure these tax cuts do not expire,” Rep. Vern Buchanan (R-Fla.), a sponsor of the measure and member of the House Ways and Means Committee, in a statement announcing the proposal.

The Ways and Means Committee and the Senate Finance Committee are the two panels responsible for tax policy in the lower and upper chambers, respectively.

But the current tax fight extends beyond the TCJA and into renewed proposals to rich Americans, a pledge that Biden has made repeatedly in the past.