The 2024 U.S. Election and the 2017 Tax Cuts and Jobs Act: Regardless of the Outcome, Taxes Are Likely to Rise

Executive summary:

  • The 2017 Tax Cuts and Jobs Act is set to expire at the end of next year, which could mean potentially higher tax bills
  • If extended by the new administration, that will likely lead to a higher budget deficit
  • The deficit will have to be paid for eventually, which could also mean potentially higher tax bills

While new tax proposals are grabbing election headlines, it’s important to remember that campaign rhetoric is not necessarily future policy. A case in point is the 2017 Tax Cuts and Jobs Act, which is set to sunset at the end of next year. If its key provisions are extended, that could lead to reduced government revenues and a higher federal deficit. This could lead to higher taxes in the future. If the key provisions are not extended, that could result in higher taxes immediately.

In this blog I am going to look at the implications of extending (or not) the tax provisions of the TCJA and how you can help your clients prepare for the potential for higher taxes either now or in the future.

The pending expiration of the 2017 Tax Cuts and Jobs Act

First, let’s make clear that no matter who takes office next year nor which political party holds the majority in either the legislative or executive branches of government, it is highly unlikely that the TCJA will get extended past its 2025 expiry date with no modifications. This is because the original bill was full of tax-related adjustments and provisions that 1) have already expired and 2) were directed at specific corporate entities and industries.

That being said, the provisions that draw the most eyeballs, and the most questions, are related to individual income taxes, investment taxes, specific tax credits that benefit individuals, and estate taxes. Assuming there is appetite within the different branches of government to extend some or most of the TCJA provisions next year, it will be done via a new bill. It’s safe to assume there will be additional provisions included. As for the specifics, we are watching and listening carefully, so stay tuned as things come into focus.

Tax Cuts and Jobs Act getting ready for sunset