Can America Afford Donald Trump’s Tax Cuts?

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Key Points and Summary: The future of the Tax Cuts and Jobs Act (TCJA), known as the Trump tax cuts, is uncertain as key provisions are set to expire in 2025.

-While the GOP now controls Congress, internal divisions over the deficit and funding priorities could delay renewal efforts. Trump’s preference for combining tax cuts, border security, and energy reforms into a single bill contrasts with Senate Republicans favoring separate legislation.

-Analysts estimate that extending all expiring provisions could cost $400 billion annually. With a narrow GOP majority and looming midterms, the window to solidify Trump’s tax legacy is rapidly closing.

Will Trump’s Tax Cuts Be Extended? The Debate Heats Up in Congress

Probably the signature legislative achievement of the first Trump presidency was the Tax Cuts and Jobs Act (TCJA), which passed in late 2017 and is known colloquially as “The Trump tax cuts.” 

The new law cut taxes for the years 2018 through 2025, although according to a Tax Policy Alliance analysis, the law added somewhere between $1 trillion and $2 trillion to the deficit, when projected out to a full decade. 

The main income tax cuts in the bill are set to expire in 2025, meaning that one subplot of the 2024 election was the question of whether those tax cuts would be extended, or not. 

However, since Trump will come into office again with a much smaller House majority than he enjoyed during the first two years of his first term, passing the tax cuts might prove somewhat complicated. 

Politico this week looked at the political dynamics of the tax cuts. The GOP may control the presidency and both houses of Congress starting on January 20, but that doesn’t mean everyone in the party is necessarily on the same page about what to do. This was seen with December’s budget resolution, which blew up at the last minute and nearly led to a government shutdown.  

Per a Politico report last week, the Republican Party is “at odds over a long list of issues, beginning with whether they should take up tax first this year or immigration.” 

One issue is that some members of the House Republican Caucus are very concerned with the deficit and that “many Republicans say a tax bill ought to be completely paid for.” Others in the Party feel otherwise, while Trump has implied that new tariffs will pay for tax cuts and other priorities, which mainstream economists have questioned. 

Politico also quoted budget analysts who stated that “rolling over the full slate of the 40 or so provisions due to expire would cost roughly $400 billion per year.”

And while Congress is said to be eying separate bills for immigration and taxes, Trump, over the weekend, stated that he would prefer one big bill, or as he’s called it, “one big, beautiful bill.” 

“Members of Congress are getting to work on one powerful Bill that will bring our Country back, and make it greater than ever before. We must Secure our Border, Unleash American Energy, and Renew the Trump Tax Cuts,” Trump wrote on Truth Social,” Trump said on Truth Social. 

Per Politico, House Speaker Mike Johnson (R-LA) told members that Trump wanted one bill, while the new Senate Majority Leader, Senator John Thune (R-SD), backs the two-bill approach. The tax bill could pass through the Senate reconciliation process, which is not subject to the filibuster, which is important in a Senate with 53 Republican Senators. 

Meanwhile, according to a Puck report, the GOP is “racing against an 18-month deadline,” assuming there will be a “shakeup” in the midterm elections that would threaten their majorities. And once the midterms pass, Trump will be fully in lame-duck status. And if a handful of special elections don’t go their way, the Republicans could lose control of the House before that. 

“Trump and his deputies are communicating something critical in the days before his second term begins,” the Puck story said. “Even as he returns to office with full Republican control of government, unrivaled attentional powers, and Oval Office experience under his belt, Trump simply doesn’t have the time to push all his campaign promises through Congress before his presidency starts to give off the stench of lame duck.” 

Former President of the United States Donald Trump speaking with attendees at the 2023 Turning Point Action Conference at the Palm Beach County Convention Center in West Palm Beach, Florida. By Gage Skidmore.

Author Expertise and Experience:

Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter