What to expect on taxes

President Joe Biden and former President Donald Trump will face off Thursday in the first presidential debate of the 2024 general election — and the presumptive nominees could show voters where they stand on tax policy, experts say.

One key issue is the Republicans’ expiring tax breaks enacted via the Tax Cuts and Jobs Act of 2017, or TCJA. Without action from Congress, several provisions will sunset after 2025, including lower federal income tax brackets, a boosted child tax credit and higher estate and gift tax exemptions, among others.

More than 60% of tax filers could face increased taxes in 2026 if TCJA provisions expire, according to the Tax Foundation.   

Andrew Lautz, associate director for the Bipartisan Policy Center’s economic policy program, said he’s looking for Biden and Trump to “move beyond some of the political rhetoric” to discuss how they plan to address next year’s TCJA expirations.

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Although both campaigns want to renew TCJA provisions for most Americans, questions remain about the cost of those extensions, particularly amid the federal budget deficit.

Fully extending TCJA provisions could add an estimated $4.6 trillion to the deficit over the next decade, the Congressional Budget Office reported in May.

After yearly budget proposals to Congress, there will be “very few surprises from the Biden tax agenda,” said Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.

“He repeats it every year, and he’s promised to pursue that which has not been enacted, which is most of it,” Rosenthal said.

Biden wants higher taxes on the ultra-wealthy and corporations to fund TCJA extensions for those making less than $400,000 only.

In his fiscal year 2025 budget, Biden called for increasing the top individual income tax rate on earnings above $400,000, bumping capital gains to regular income tax rates for households making more than $1 million and a 25% minimum tax on wealth exceeding $100 million.

However, the future of these proposals is unclear with control of Congress uncertain.

“Trump is the wild card,” Rosenthal said. “It’s hard to say how serious he is about some of these ideas he just throws out there.”

So far, Trump has said he aims to fully extend expiring TCJA provisions and has voiced support for tariffs, which are taxes levied on imported goods. Trump has also floated eliminating taxes on workers’ tips and an “all tariff policy” to get rid of the income tax.

The debate could also address Trump’s and Biden’s policies on tariffs, which both candidates have supported to varying degrees, according to Erica York, senior economist and research director at the Tax Foundation’s Center for Federal Tax Policy.

“We know the economic reality,” she said. “[Tariffs] cost American businesses. They create a disadvantage for our firms trying to compete across the globe because they increase input costs here.”

During his term, Trump added tariffs on China, Mexico, the European Union and others. Many of the tariffs on China have remained in place under the Biden administration.