With the US Election Just 4 Months Away, America’s Next Tax Plan Is Shaping Up – The Average Joe

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    With the US Election Just 4 Months Away, America’s Next Tax Plan Is Shaping Up

    Noah Weidner

    May 28, 2024

    Americans can run, but they can’t hide from politics — and unfortunately, you’re not safe here either because the country’s next election is just 159 days away. And today, we need to talk about one of the country’s most heavily debated topics: taxes.

    Whichever party wins Congress and the Presidency will win the power to reshape America’s tax code for the first time since 2017 — and the two parties have vastly different visions for taxes.

    Who’s in charge? In 2017, Donald Trump and the Republican party passed the Tax Cuts and Jobs Act (TCJA), temporarily lowering tax rates for individuals, estates, and businesses. While some argue the TCJA provided benefits, it also reduced deductions and tax credits for Americans and small businesses. The TCJA added between $1-2T to the federal debt, making it enormously controversial as its 2025 expiration date approaches.

    • Republicans pledge to make the TCJA’s changes permanent if they win in November — a move that would further enrich wealthy Americans and US businesses.
    • The Congressional Budget Office says the permanent changes could increase the deficit by $4.6T between 2025 and 2034, exasperating America’s debt problem.

    What’s the Alternative?

    If Democrats hold the quill come 2025, the sequel to the TCJA could look dramatically different. By the end of 2025, tax rates for most Americans would revert to pre-2018 levels. The Democrat plan would shift the tax burden to wealthy Americans and businesses, potentially costing them nearly $5T, according to PwC.

    • A memo circulated by the Biden Admin suggests higher corporate tax rates and new levies targeting billionaires, high executive pay, and Americans making more than $400K a year.
    • The Tax Foundation estimates this plan could generate $4.4T in revenue over 11 years — but might impact jobs, GDP, and wages.

    And if no one wins? If no party gains a decisive majority, the next tax bill could be a bipartisan effort, combining elements of both parties’ visions. Americans will have to wait until November to see what will replace the TCJA.

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