The upcoming November election will have high stakes when it comes to taxes. Many of the tax provisions in the 2017 reform law are set to expire in 2025, reverting to the pre-2017 rules unless Congress acts. This means the next president will have to confront this issue and work with Congress to determine the future of the tax code.
Unified government – where the presidency and both houses of Congress are controlled by the same party – would make it easier for a candidate to enact their desired tax changes. Divided government, on the other hand, would require more compromise.
Donald Trump has several tax policy proposals he would likely pursue if elected. His key aims include making the 2017 tax cuts permanent, further lowering individual and business rates, eliminating the tax on tips, and providing incentives for homeownership. He also supports reducing the corporate tax rate, imposing tariffs, and rolling back clean energy credits and R&D amortization rules.
Additionally, Trump has called for repealing the Johnson Amendment, which restricts political activity by tax-exempt organizations. The conservative Heritage Foundation has also put forth a “Project 2025” plan that envisions sweeping tax changes like a 15-30% individual income tax structure, an 18% corporate rate, and the elimination of many deductions and credits.
In summary, the 2024 election will be pivotal in determining the future direction of the US tax system, with significant differences between the potential policy agendas of the candidates. Voters will need to carefully consider the tax implications when making their choices.