President Biden has stirred up controversy by indicating that he would allow the individual provisions of the 2017 Tax Cuts and Jobs Act to expire at the end of 2025 if he is reelected. Critics have accused him of promising “Tax Hikes For All,” as letting the TCJA expire could raise taxes on most Americans, not just the wealthy. The Wall Street Journal columnist James Freeman warned of dire consequences if Biden chooses not to extend the expiring provisions of the TCJA.
While Biden’s statement implies that he would let the TCJA expire without replacing it with anything, there are aspects of the law that he would likely retain. In his recent budget proposal, Biden included ways to revise the TCJA without raising taxes for all households. He has pledged to never raise taxes on those making $400,000 or less, while potentially increasing taxes on high-income households and corporations.
Despite accusations of flip-flopping on his promise to protect lower-income tax filers, Biden’s recent tweet aligns with his long-standing commitment not to raise taxes for the majority of households. By proposing changes to key provisions of the TCJA while retaining others, Biden may be reshaping the tax code without completely scrapping the previous law. Philosophical questions about identity and semantics may elicit debate, but in practical terms, the evolution of tax laws is a complex and ongoing process.
Biden’s plans to overhaul parts of the TCJA, such as raising the top income tax rate, expanding the Child Tax Credit, and adjusting corporate and capital gains tax rates, suggest a significant departure from the Trump-era tax law. While some features of the TCJA may survive in Biden’s proposed revisions, the overall tax code is expected to undergo substantial changes. The public’s dissatisfaction with the TCJA’s impact on taxes has likely influenced Biden’s decision to let it expire, at least in name.
Changes to the tax law are inevitable, with provisions constantly evolving over the years. Even landmark reforms like the Tax Reform Act of 1986 have seen modifications over time. It remains to be seen whether Biden’s proposed revisions to the TCJA will be substantial enough to warrant a new name for the tax code or if they simply represent a continuation of ongoing changes. As the debate over tax policy continues, lawmakers will need to focus on preserving effective tax provisions while addressing areas in need of reform.
