Chairman Jason Smith (R-MO) speaks during a House Committee on Ways and Means in the Longworth House Office Building on April 30, 2024 in Washington, D.C.
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House Republicans Push for Extension of 2017 Tax Legislation Ahead of Trump’s Presidency
With less than one week until President-elect Donald Trump takes office, there is a push from some House Republicans to swiftly extend the GOP’s 2017 tax legislation.
Tax Provisions at Risk of Expiration
Without congressional action, trillions of dollars in tax breaks are set to expire after 2025, including lower tax brackets, a more generous child tax credit, and a 20% deduction for pass-through businesses. The Tax Foundation estimates that over 60% of taxpayers could face higher taxes in 2026 without the extensions.
“We must not leave families and small businesses waiting for Congress to provide tax relief at the last minute,” emphasized House Ways and Means Committee Chairman Jason Smith, R-MO.
Challenges and Criticism
While Republicans hold full control of Congress and the White House, there are concerns about the cost of fully extending Trump’s expiring tax provisions, especially in light of the growing federal budget deficit.
Some Democrats argue that the TCJA extensions primarily benefit the wealthy rather than middle-class families. “The American people are living under this tax plan and they need relief from it,” stated Richard Neal, D-MA.
Financial Impact of Extending Tax Cuts
Extending Trump’s expiring tax cuts could cost an estimated $4.2 trillion over 10 years, according to the Treasury report. The report also highlights the disparity in savings between average families and the top earners.
If extended, the average family could save 2.2% of after-tax income, while the top 0.1% of earners might see a 4.2% reduction. Based on 2025 data, the average family could save around $2,000 per year, while the highest 0.1% could potentially save about $314,000.
Concerns and Opposition
There are concerns about the impact of extending the tax cuts on the federal budget deficit and the distribution of savings among different income groups.