Biden has promised to let Trump-era tax cuts expire next year, meaning higher tax rates for millions

President Joe Biden has promised to expire most of the tax cuts and jobs law if he wins re-election, meaning millions of Americans could soon face higher tax bills.

Biden tweeted Tuesday: “Donald Trump is very proud of his $2 trillion tax cut plan that greatly benefits the wealthy and largest corporations and reduces the federal debt. “The tax cuts will expire if I’m re-elected.”

The law, enacted by former President Donald Trump in 2017, overhauled the nation’s tax code, including lowering the top personal income tax rate from 39.6% to 37% and nearly doubling the standard deduction.

However, these changes to individual parts of the tax code are set to be rolled back in 2025, meaning many taxpayers, including those with incomes of less than $400,000, will face stiffer taxes if the law is not extended.

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“If lawmakers allow full expiration, most Americans will see their personal tax bills rise and incentives to work and invest will worsen,” said Erica York, senior economist and research director at the Tax Foundation.

In addition to lowering the top tax bracket for wealthiest Americans, the Trump-era law raises thresholds for various income tax brackets — essentially reducing responsibility for many families.

Pre-TCJA Single Personal Tax Bracket:

2017 personal income tax brackets before the Trump tax law takes effect.

• 10%: Taxable income up to $9,525
• 15%: Taxable income exceeds $9,525
• 25%: Taxable income over $38,700
• 28%: Taxable income over $93,700
• 33%: Taxable income exceeds $195,450
• 35%: Taxable income exceeds $424,950
• 39.6%: Taxable income over $426,700

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Single personal tax bracket under the TCJA:

Personal income tax brackets for 2024 under current tax law.

• 10%: Taxable income up to $11,600
• 12%: Taxable income over $11,600
• 22%: Taxable income over $47,150
• 24%: Taxable income exceeds $100,525
• 32%: Taxable income exceeds $191,950
• 35%: Taxable income exceeds $243,725
• 37%: Taxable income exceeds $609,350

According to the Tax Foundation, the tax law is set to expire on December 31, 2025, meaning many Americans will be forced to pay 1% to 4% more in taxes unless certain provisions are extended or made permanent.

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This issue may be the focus of debate in the meeting Popular suffrage. Trump has promised to cut taxes if he’s re-elected in November. Treasury Secretary Janet Yellen previously said Biden would try to preserve tax cuts for Americans making less than $400,000 during a second term in the White House.

A White House official told Fox Business that Biden’s tweet reiterated what was included in the president’s budget — that tax cuts for those making more than $400,000 would expire, but not for those making less than $400,000 — and taxes for middle-income Americans. The cut will remain unchanged.

The problem, however, is that the Congressional Budget Office estimates that extending the TCJA would increase the federal budget deficit by about $3.7 trillion.

The original law was paid for in part with the so-called SALT deduction cap, which limits the amount of state and local taxes Americans can deduct to $10,000 from their federal taxes. The cap will also expire in 2025.

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However, the salt cap has lost its effectiveness as a revenue source since 2017 due to the new solution.

“While lawmakers may not be aware of the upcoming expiration this year, they should consider the pros and cons of each change to the 2017 tax code and prepare for the upcoming expiration,” York said. Make the tax code law without worsening the U.S. debt.”