Trump Vows More Tax Cuts as 2017 Cuts Set to Expire, Biden Allows Expiration

Donald Trump pledges to extend and expand 2017 tax cuts if re-elected, while Joe Biden proposes tax hikes on businesses and the rich to fund social programs. The fate of the Trump-era tax cuts, set to expire in 2025, has become a central issue in the 2024 US presidential election.

author-image
Aqsa Younas Rana
New Update
Trump Vows More Tax Cuts as 2017 Cuts Set to Expire, Biden Allows Expiration

Trump Vows More Tax Cuts as 2017 Cuts Set to Expire, Biden Allows Expiration

As the 2024 US presidential election approaches, the fate of the Trump-era tax cuts, set to expire in 2025, has become a central point of contention between the two leading candidates. Former President Donald Trump has pledged to double down on tax cuts if he wins a second term, while President Joe Biden has called for tax hikes on businesses and the richest Americans, allowing the expiration of the 2017 tax rate reductions.

Why this matters: The outcome of this tax policy debate will have significant implications for the US economy, affecting everything from consumer spending to business investment and government revenue. The decision will also influence the country's fiscal health, potentially impacting the national debt and future generations.

At a recent rally in Wildwood, New Jersey, Trump drew a clear distinction between his tax policy and Biden's, stating, "Instead of a Biden tax hike, I'll give you a Trump middle class, upper class, lower class, business class big tax cut." Trump's promise to cut taxes is seen as a way to appeal to middle-class and business voters who may be affected by the expiration of the tax cuts.

The 2017 tax rate reduction, which lowered income tax rates for individuals and corporations, was funded by debt. With rising healthcare costs, an aging population, and increasing interest rates, extending these cuts may no longer be feasible. Both Biden and Trump want to make most of the cuts permanent, but they differ in their approach. Biden would extend individual cuts to all but the top 2% of earners, while Trump wants to make the entire package permanent. Extending Trump's tax cuts could potentially cost $1.4 trillion over 10 years, running the deficit into the stratosphere.

The question of who will foot the bill for these tax cuts is a contentious one. Biden's recent budget proposes increasing the rate paid on every dollar earned above $400,000 to 39.6% from the current 37%, among other measures targeting wealthy taxpayers. Large corporations, which saw their tax rate cut from 35% to 21% in the 2017 overhaul, may also see this generous cut on the table as a means to pay for extending individual tax cuts. Pass-through business owners, who were allowed to deduct up to 20% of their business profits from their taxable income, may see this expensive provision allowed to expire.

Karoline Leavitt, Trump campaign spokeswoman, stated, "When President Trump is back in the White House, he will advocate for more tax cuts for workers, families, and all Americans and reinvigorate America's energy industry to bring down inflation, lower the cost of living, and pay down our debt." However, Erica York, senior economist and research director at the Tax Foundation, warns, "It's time to pay the piper."

As the 2024 US election year unfolds, the fate of the Trump-era tax cuts and the contrasting tax policies of the two leading candidates are set to become a defining issue. With the expiration date looming in 2025, voters will have to weigh the potential benefits and costs of extending or allowing these cuts to expire, making their choice at the ballot box in November.

Key Takeaways

  • Trump pledges to extend and expand 2017 tax cuts if re-elected.
  • Biden proposes tax hikes on wealthy Americans and businesses to fund social programs.
  • Extending Trump-era tax cuts could cost $1.4 trillion over 10 years.
  • Biden's plan targets top 2% earners, while Trump wants to make entire package permanent.
  • Fate of tax cuts will impact US economy, national debt, and future generations.