There’s no doubt that tax policy is a major focus of this presidential election. Donald Trump and Joe Biden have different plans for how taxes should be handled — but both candidates have talked about the 2017 Tax Cuts and Jobs Act.
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What Was the Act?
Trump signed the act — widely considered the biggest tax overhaul in decades. According to the Brookings Institution, “The new tax law makes substantial changes to the rates and bases of both the individual and corporate income taxes, most prominently cutting the maximum corporate income tax rate to 21%, redesigning international tax rules, and providing a deduction for pass-through income.”
There’s a big reason it’s a major focus of the election — many of the individual income and estate tax provisions are set to expire. Trump and Biden have talked about their plans to extend or end those provisions.
How Did It Impact Taxpayers?
As an individual taxpayer, just how helpful was Trump for your tax bill? Critics have said the provisions did little to help families — but did a great deal to help corporations and the rich.
The Center on Budget and Policy Priorities said the Act failed to deliver its promised economic benefits and that this year is a time to make a course correction. According to the Center, “This would mean reversing the regressive tilt of the 2017 law, raising more revenue, and correcting priorities to advance the interests of low- and moderate-income families across the country instead of those of wealthy shareholders.”
What Does Trump Plan to Do?
If they didn’t help you the first time, maybe they will the second time? Trump has said if he’s elected again he’ll likely make those individual and estate tax cuts permanent. According to the Center, “In dollar terms, extending the expiring provisions only (that is, excluding the effect of the large corporate tax cuts the law made permanent) would result in a $48,000 tax cut for households in the top 1% in 2026, but only about $500 for those in the bottom 60% of households, on average”
What Are the Costs?
There are continuing concerns about the price tag for all of these provisions. The Congressional Budget Office has estimated that permanently extending the expiring provisions from the Trump cuts would cost $4 trillion over the next 10 years. That’s $400 billion per year.
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This article originally appeared on GOBankingRates.com: Why Trump’s Presidency Wasn’t the Best for Your Tax Bill — and What a Second Term Could Mean