President Joe Biden announced he plans to let components of former President Donald Trump’s Tax Cuts and Jobs Act expire if he is reelected, meaning millions could expect to see tax hikes as high as 4%.
The legislation Trump signed in 2017 lowered corporate taxes from 35% to 21%, and it also lowered personal income tax rates through 2025.
“Donald Trump was very proud of his $2 trillion tax cut that overwhelmingly benefited the wealthy and biggest corporations and exploded the federal debt,” Biden posted on X. “That tax cut is going to expire. If I’m reelected, it’s going to stay expired.”
Trump’s tax break reduced the top individual income income bracket from 39.6% to 37%. However, if Biden lets the tax breaks expire, it will not just affect the wealthy. The Tax Foundation found that a person making $30,000 per year would pay $253.75 more in taxes in 2026, and a married couple with two children making $165,000 would pay $2,450.50 more in taxes.
“If lawmakers allow full expiration to occur, most Americans will see their personal tax bills rise and incentives for working and investing worsen,” Erica York, senior economist and research director at the Tax Foundation, told Fox Business.
However, White House officials said that if reelected, the president would extend tax cuts for those making less than $400,000.
“His budget would further cut taxes for the middle class and working families,” a White House spokesperson said. “He has said that repeatedly and in every budget. Trump and Republicans are responsible for the egregious and fiscally reckless cliff that is in the Trump Tax Cuts — they are the reason taxes will raise for the middle class after 2025.”
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The Congressional Budget Office estimated that extending the TCJA would add an additional $3.7 trillion to the federal budget deficit.
“Though lawmakers may not address the looming expirations this year, they should prepare for the upcoming expiration by weighing the trade-offs of each change the 2017 tax law made,” York said. “Lawmakers should cement into law a tax code that promotes growth and opportunity without worsening U.S. debt.”
