2024 Election: Tax Cuts' Impact on Finances

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As the 2024 presidential election looms large, the fate of the 2017 Tax Cuts and Jobs Act (TCJA) is emerging as a critical issue for voters. This major tax reform, which significantly benefited millions, is set to expire after 2025 unless Congress acts to extend it. With these tax breaks on the line, the election outcome could profoundly impact your finances in future years.

The TCJA, introduced by former President Donald Trump, aimed to fuel economic growth by reducing tax burdens for individuals and corporations. While it initially provided substantial relief, these cuts were always meant to be temporary, expiring after 2025. As we near that deadline, the future of these tax breaks is becoming a pivotal point in the presidential race.

Economists are sounding alarms about the potential consequences of allowing the TCJA to lapse. Erica York, a senior economist at the Tax Foundation, warns that if the tax cuts expire, around 62% of taxpayers could see their tax bills rise. The TCJA was designed to provide tax reductions for a broad range of Americans, and its expiration could mean a significant financial hit for many households.

Recent surveys reveal growing frustration with the current tax system. A Gallup poll shows that 56% of Americans feel they are paying too much federal income taxes. Meanwhile, an AP-NORC survey indicates that only 22% believe they receive adequate services in return. This discontent underscores why the tax policies proposed by presidential candidates are critical to voters.

Donald Trump and Kamala Harris present sharply contrasting tax plans in the presidential race. Trump, seeking re-election, advocates for extending the TCJA’s tax cuts and implementing new tariffs. His proposals aim to continue the tax relief he believes will foster economic growth.

Kamala Harris, the Democratic candidate, offers a different vision. Her plan includes raising corporate taxes and introducing new credits for middle- and lower-income families. Harris’s approach focuses on addressing income inequality and providing additional support to those feeling the burden of the current tax system.

However, it’s important to note that while both candidates have outlined their tax plans, enacting these changes will not be straightforward. Both candidates would face significant challenges in implementing their proposed reforms as Congress controls taxation, not the executive branch. With neither party poised to make sweeping gains in the House or Senate and the possibility of continued divided control, legislative gridlock is a genuine concern.

This political reality means that the tax plans proposed by Trump and Harris may serve more as indicators of their economic philosophies rather than concrete changes. The struggle to navigate a divided Congress could make it difficult for either candidate to push their whole agenda, highlighting the complex interplay between executive promises and legislative action.

As the 2024 election draws nearer, voters will need to weigh the potential impacts of these tax policies on their personal finances and the likelihood of these plans becoming reality amid Congressional challenges. The election's outcome could shape the future of American tax policy and, by extension, your wallet for years to come.