Republicans are looking to extend former President Donald Trump’s 2017 tax cuts law, which is set to expire next year if they sweep the election.
Both parties are considering the issue, with Democrats supporting certain cuts for lower-income individuals and Republicans likely having the best chance at extending all cuts.
“Republicans of course want to extend all of it, a lot of Democrats want to extend a lot of it,” Institute on Taxation and Economic Policy director Steve Wamhoff said.
“There’s certainly pressure that if Congress doesn’t do something, some people are going to have tax increases, and there’s always this idea that tax increases are bad.”
The expiring tax cuts include changes like increased tax rates for top earners and a decrease in the standard deduction.
“The U.S. does face some constraints,” former IMF executive director Charles Dallara said. “Eventually those constraints will either be recognized sensibly by our political leadership or they’ll be recognized in a more disruptive fashion probably by the markets.”
Critics argue that the savings from the proposed bill to extend tax cuts primarily benefit the wealthiest Americans.
President Joe Biden aims to extend the tax cuts for those making less than $400,000 a year, while concerns about the deficit loom on the horizon.
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