As November approaches, voters’ heads are full of all kinds of different issues. Some of the topics that are front and center this election are things the president and members of Congress can directly impact, while others are not. The irony is that one of the most important issues that will be affected by the upcoming election is receiving relatively little attention — the fate of the 2017 tax cut law.
It’s not that the presidential candidates haven’t mentioned taxes. Both Trump and Harris have pledged to exempt tips from income tax, while Trump has also proposed to exempt Social Security benefits, overtime pay and public employees like firefighters and service members.
But while these proposals have gotten all the attention, they remain fringe ideas that are unlikely to find much support in Congress. Meanwhile, next year the composition of Congress and who sits in the White House will determine which tax cuts from 2017 stay and which go.
The landmark achievement of the Republican trifecta after the 2016 election was the Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA cut taxes for about 80 percent of taxpayers (or around 115 million households), reduced the corporate tax rate from one of the highest in the developed world to a more competitive 21 percent and simplified the tax code for the first time in decades.
Unfortunately, in order to be compliant with one of the many arcane procedural rules of the Senate, many provisions of the TCJA had to be made to expire at the end of 2025 in order to pass them through obstruction by Democrats in Congress. This includes important pro-taxpayer changes like the doubled standard deduction, lower tax brackets, the expanded child tax credit, the higher threshold for the Alternative Minimum Tax (AMT), the 20 percent small business deduction and more.
Absent a legislative fix this next year, all those tax cuts will evaporate overnight, increasing taxes for tens of millions of Americans (the Tax Foundation has a handy calculator to see how much TCJA expiration would cost you and your family here). It also would reverse many of the important changes that the TCJA made to deliver a robust pre-pandemic economy.
That means that this year’s national-level elections will decide who is in the driver’s seat as the extension of the TCJA is negotiated. It probably is not contentious to say that Democrats will extend less of the TCJA than Republicans will. Democrats have spent the past seven years inaccurately deriding the TCJA as a handout to the wealthy at the expense of the middle class and an irresponsible booster of the national debt — an ironic claim, given Democrats’ far more expensive and inflationary stimulus bill pushed through in March of 2021.
So even though it is not what is dominating the airwaves this election season, taxes should be among the most important issues voters are thinking about in November. After all, even if voters are not thinking about it, taxes are going to be at the top of the agenda for whoever they elect.
Andrew Wilford is the Director of the Interstate Commerce Initiative with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.
This article was originally published at dailycaller.com
