The Daily Populous Sunday January 26th, 2025 night edition
Authored by cbsnews.com and submitted by stfzendjjv

Many Americans face tax increases in 2026 if tax cuts are not passed

A key economic priority for President Trump this year is to extend the provisions in his signature Tax Cuts and Jobs Act, a 2017 law that lowered tax rates for most Americans, before they expire at the end of 2025. Now, Republican lawmakers have developed a 50-page laundry list of ideas for how to pay for those planned cuts.

The plan from congressional Republicans, published earlier by the New York Times, was confirmed by a person familiar with the document, who noted that it represents a menu of policy options for lawmakers to consider. The document also cites several new tax breaks proposed by Mr. Trump while on the campaign trail last falls, such as eliminating taxes on overtime and tips.

But extending the TCJA's provisions alone could prove costly, with the Congressional Budget Office forecasting a cost of $4.6 trillion over 10 years. Adding new tax breaks, such as Mr. Trump's promise to ditch taxes on overtime pay, could push up the bill even higher at a time when the nation's debt has spiraled to more than $36 trillion.

According to the document, some ideas for funding those tax breaks include eliminating the mortgage home deduction, a popular break for homeowners, and the deductibility of student loan interest. Other methods to drum up more money include an across-the-board 10% import tariff — essentially, a universal tax on U.S. imports that would be paid by consumers.

The plan also outlines ideas for cutting federal spending, primarily by trimming outlays for social safety net programs such as Medicaid and food stamps. Overall, the document points to a potential tax overhaul that could put more money in the pockets of wealthier Americans while cutting assistance for low- and middle-class taxpayers, experts say.

"If you are extending the tax cuts and enacting tariffs and cutting Medicaid, that will deliver benefits more among higher-income households, and more of a cost will be born by lower-income households," Joseph Rosenberg, a senior fellow at the Urban-Brookings Tax Policy Center, a tax-focused think tank, told CBS MoneyWatch.

Adding a blanket 10% tariff could raise $1.9 trillion over the next decade, according to the document shared with Republican lawmakers. But tariffs are largely paid by consumers because companies tend to raise their prices to cover the extra import duties. Mr. Trump's tariffs could add $2,600 a year in costs for the typical U.S. family, according to an August analysis from the Peterson Institute for International Economics, a nonpartisan think tank focused on economic issues.

Trump administration officials didn't immediately respond to a request for comment.

Some long-standing tax breaks could face elimination, according to the document:

Mortgage interest deduction: This could either be cut entirely or lowered to a $500,000 cap, with the former idea saving $1 trillion over a decade and the latter $50 billion over the same period.

This could either be cut entirely or lowered to a $500,000 cap, with the former idea saving $1 trillion over a decade and the latter $50 billion over the same period. "Head of household" tax filing status: This filing status provides a larger standard deduction for unmarried adults with children. Eliminating it could save $192 billion over 10 years.

This filing status provides a larger standard deduction for unmarried adults with children. Eliminating it could save $192 billion over 10 years. American Opportunity Credit: This $2,500 tax credit is given for educational expenses amassed over the first four years of a person's higher education. Revoking it would save $59 billion over a decade.

This $2,500 tax credit is given for educational expenses amassed over the first four years of a person's higher education. Revoking it would save $59 billion over a decade. Child and Dependent Care tax credit: This credit helps families with young children pay for up to $2,100 in annual child care expenses. Waiving it would save $55 billion over a decade.

This credit helps families with young children pay for up to $2,100 in annual child care expenses. Waiving it would save $55 billion over a decade. Student loan interest deduction: Scrapping this deduction, used by people with student loan debt, could save $50 billion over 10 years.

Scrapping this deduction, used by people with student loan debt, could save $50 billion over 10 years. Lifetime Learning Credit: This nonrefundable tax credit is equal to 20% of qualified tuition and related expenses under $10,000. Repealing it would save $26 billion over 10 years.

The document also outlines several ideas for lowering taxes, in addition to eliminating taxes on overtime and tips. They include:

Eliminating the estate tax: This proposal would most benefit ultra-rich families given that the estate tax hits people with assets of nearly $14 million. Removing this tax would cost the U.S. $370 billion over 10 years.

This proposal would most benefit ultra-rich families given that the estate tax hits people with assets of nearly $14 million. Removing this tax would cost the U.S. $370 billion over 10 years. Raising or eliminating the SALT deduction cap: Mr. Trump's TCJA introduced a controversial $10,000 cap on deducting state and local taxes

Mr. Trump's TCJA introduced a controversial Making auto loan interest tax deductible: This idea, which was floated

While campaigning last year, Mr. Trump proposed scrapping the $10,000 cap on the SALT deduction, which he introduced in his 2017 tax bill. The issue has become increasingly unpopular among Republicans and Democrats alike, as rising home values and property taxes across the nation means more homeowners are feeling the pinch from the deduction limit.

"The SALT cap was effectively one of the biggest pay-fors in the 2017 legislation, and raising it is expensive," the Tax Policy Center's Rosenberg said. "The president recently signaled again that the most likely direction is for the SALT cap to be raised rather than to be eliminated."

rainbowshummingbird on January 25th, 2025 at 18:22 UTC »

Sounds like the usual republican ploy. How many times can the 77 million dumbsh*t trump voters be fooled into voting against their own financial wellbeing?

MalevolentTapir on January 25th, 2025 at 18:15 UTC »

I do appreciate they at least aren't pretending this is going to benefit anyone but the ultra-wealthy with Reaganomics 2.0 here

SatiricLoki on January 25th, 2025 at 18:15 UTC »

Just like every time they get into office.