Fernando
Elite Member
- Joined
- Nov 7, 2016
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- Certified Residential Appraiser
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End of Trump tax cuts would see 62% pay more—how Congress may respond
As Donald Trump prepares for his return to the White House, American taxpayers are watching anxiously to see what will happen to the trillions of dollars in tax breaks scheduled to expire at the end of 2025.
Those income tax cuts resulted in a 1% to 4% reduction in all but the lowest of the seven tax brackets imposed under the current IRS regime. If Congress does not pass a law to extend the reduction, the higher rates will snap back into place, as will older provisions that set the bar lower for estate taxes.
Now Republicans have an opportunity to extend the cuts, a road made easier since Democrats—who had opposed the TCJA in 2017 on grounds it unduly favored the wealthy—do not control the House, Senate, or presidency next year. Many financial advisors and other experts expect Republicans to at least extend some of the most popular provisions, like the lower federal rates and higher standard deduction.
One provision that might not get extended: the $10,000 cap on state and local property tax deductions, known as SALT. Because any change to the SALT cap benefits only taxpayers who itemize their deductions and pay more than $10,000 in state and local income or sales and property taxes, letting the cap expire would be a boon to households earning between $200,000 and $500,000, according to right-leaning think tank the Tax Foundation. But Trump has voiced his support for eliminating the cap.