Why Trump’s tax plans could be ‘complicated’ in 2025, policy experts say
U.S. President-elect Donald Trump speaks during a meeting with House Republicans at the Hyatt Regency hotel in Washington, D.C., on Nov. 13, 2024.
Allison Robbert | Via Reuters
Congressional lawmakers will soon debate expiring tax breaks and new promises from President-elect Donald Trump.
Agreeing on cuts and spending, however, could be a challenge.
With a majority in the House of Representatives and Senate, Republican lawmakers can pass sweeping tax legislation through “reconciliation,” which bypasses the Senate filibuster. Republicans could begin the budget reconciliation process during Trump’s first 100 days in office.
But choosing priorities could be difficult, particularly amid the federal budget deficit, policy experts said Tuesday at a Brookings Institution event in Washington.
Legislators will be “representing their districts, not their party,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, said Tuesday in a panel discussion at the Brookings event.
“This is a lot more complicated than just the reds against the blues,” he said.
More from Personal Finance:
89% of Americans say they do not consider themselves wealthy
As market experts talk of ‘animal spirits,’ what it means for your investments
How to leverage the 0% capital gains bracket as the price of bitcoin surges
‘Political divisions’ could be a barrier
With a slim majority in Congress, Republican lawmakers will soon negotiate with several blocks within their party. Some of these groups have competing priorities.
Enacted by Trump in 2017, the Tax Cuts and Jobs Act, or TCJA, is a key priority for the next administration.
Without action from Congress, trillions of tax breaks from the TCJA will expire after 2025. These include lower tax brackets, higher standard deductions, a more generous child tax credit, bigger estate and gift tax exemption and a 20% tax break for pass-through businesses, among other provisions.
The more things you try to bring in, the more potential political divisions we have to navigate.
Molly Reynolds
senior fellow in Governance Studies at Brookings Institution
Tax bill could take longer than expected
Since budget reconciliation involves multiple steps, policy experts say the Republican tax bill could take months.
Plus, Congress has until Dec. 20 to fund the government and avoid a shutdown. A stopgap bill could push the deadline to January or March, which could take time from Trump’s tax priorities.
“The idea that they’re going to do this in 100 days, I think, is foolish,” Gleckman said. “My over-under is December 31, 2025, and that might be optimistic.”
However, the bill could get through by Oct. 1, 2025, which closes the federal government’s fiscal year, other policy experts say.
#Trumps #tax #plans #complicated #policy #experts