As we all know 2024 presidential has just passed and Americans in their wisdom have again voted for former President Donald Trump. Others start to try to forecast the type of economic policies that may be drafted in the next four years. Many voters are probably wondering how this second Trump administration will affect their taxes.
In light of CNBC’s report, Trump formulated the Tax Cuts and Jobs Act (TCJA) in 2017, which among others provided. A bigger estate and gift tax exclusion, higher standard deductions, a higher child tax credit, and lower marginal rates. Furthermore, unless Congress steps in, the TCJA tax benefits will expire in 2025.
If such provisions, almost 60% of taxpayers would see increased taxes. Trump would like to keep all of the TCJA tax cuts that are about to expire. In addition to extending the TCJA tax reductions, if Congress agrees, Trump ran on a platform of removing tip taxes, as well as taxes on overtime compensation and older citizens’ Social Security payments. Additionally, Trump has suggested doing away with income taxes completely and replacing them with uniform tariffs on all imports.
Current Scenario
At the time of writing this, the Republicans have won the Senate but we are yet to count the votes to establish the division of the House of Representatives. This is because, similar to the extension of the TCJA tax incentives, many of these ideas would need Congressional backing. However, history suggests that Trump’s ultimate goal will be to maintain lower taxes.
Another regrettable idea that Trump came up with during the presidential campaign was to set a base tariff for imported goods between 10% and 20%. A 10% uniform tariff, according to the impartial Tax Foundation. It would raise household taxes in the United States by an average of $1,253.
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