The Trump tax cuts are set to expire later this year, and that poses a real challenge for policymakers, businesses, and taxpayers alike. Americans face a $4 trillion tax hike as key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) sunset. The stakes are too high to ignore, and it has to be done right.
Failure to make most of the cuts permanent would be detrimental to economic growth, something we can ill afford. And while Republicans control the White House, House, and Senate, the path is fraught with political and fiscal obstacles.
For budgetary reasons, the tax reductions were made temporary. These included lowering individual income tax rates, nearly doubling the standard deduction, increasing the child tax credit from $1,000 to $2,000, placing a $10,000 cap on the state and local tax (SALT) deduction, and significantly increasing the exemption amount for the estate tax. Without legislative action, these provisions will revert to their pre-2018 levels.
