Staff Reports
President-elect Donald Trump is set to kick off his second nonconsecutive term backed by a Republican-controlled Congress, boasting a 53-47 majority in the Senate and a House configuration that’s likely a narrow 221-214. In other words, the grand ol’ GOP is ready to roll up its sleeves once again. With Trump scoring some significant victories in the Electoral College and even the popular vote, he comes into office with what can only be described as a resounding mandate. This isn’t just a whisper from the electorate—it’s more of a megaphone demanding economic recovery from the mess left by the exiting President Biden and his defeated 2024 rival, Vice President Kamala Harris.
The plan for Trump is clear. He needs to seize the moment while his supporters are revved up and ready to go. His first order of business? Ensuring his 2017 Tax Cuts and Jobs Act doesn’t just become a fleeting memory. With a grace period of 100 days to make his mark, the Trump administration has the chance to provide the type of economic resurgence America needs, and this begins with making the tax cuts permanent and expanding the child tax credit.
"Wow, working families are really struggling with high costs. Guess it's time to give tax breaks to the people at the top who are profiting from those costs!"
Genius. pic.twitter.com/fd9uZYt6H2
— Americans For Tax Fairness (@4TaxFairness) November 13, 2024
Now, while it’s true that lowering the corporate tax rate from an absurd 35% to a more reasonable 21% was a big step forward, some crucial parts of the Tax Cuts and Jobs Act (TCJA) are on borrowed time and set to expire at the end of 2025. If nothing is done, taxpayers could see their individual income tax rates surge, the child tax credit cut by half, and the standard deduction halved as well. This will be akin to taking a sledgehammer to the wallets of hardworking families who are still trying to get back on their feet post-pandemic.
The TCJA’s doubled child tax credit and boosted standard deduction were game changers for middle and working-class Americans. These measures simplified the tax payment process for millions and allowed more people to actually enjoy the money they earn. Prior to the TCJA, about two-thirds of filers opted for the standard deduction; now only a minuscule 10% prefer to muddle through the mess of itemized deductions. What’s the takeaway? Without an extension, around 62% of taxpayers face looming tax hikes that they definitely didn’t vote for.
Rather than chasing after lesser cuts down the road, Trump needs to prioritize the TCJA’s preservation while also expanding the child tax credit. This is a chance to alleviate the tax burden on families while flipping the bird to regressive deductions like the state and local tax (SALT) deduction and the mortgage interest deduction (MID). The SALT deduction is particularly galling, as it disproportionately benefits the wealthy, allowing the top 1% of earners to snag a majority of the advantage. Reminding the blue states of their own decisions, getting rid of the SALT could help curb the ever-increasing tax pressure on citizens in red states.
On top of that, eliminating the MID, which costs taxpayers about $30 billion a year, could free up roughly $60 billion annually if capped. That money could be funneled straight into expanding the child tax credit, bringing it up to $3,000 per child. Imagine that! A tax break going to families rather than lining the pockets of the wealthy. This move is not just good politics; it’s smart economics, potentially boosting GDP by 0.5% and creating close to 700,000 jobs.
The stakes are high, and this moment is ripe for Trump to take real action. The time has come for bold moves that reward those who helped put him back in power. If he wants to truly honor the working-class coalition that propelled him into the White House, he must take the bull by the horns, ensure that no tax hikes hit their pockets, and solidify his economic legacy in a way that delivers solid returns for America’s families and businesses.
