Republicans in Congress have talked a lot about passing a big tax cut package in 2025. But most Americans probably don’t realize the reason — it’s because the individual tax cuts approved by Donald Trump in 2017 are set to expire.
While all sorts of business tax changes were made permanent, the Trump tax cuts for individuals were designed to last only eight years.
That means if nothing gets done by Congress on taxes in 2025, a big chunk of the tax code would snap back to 2017 for individuals — bringing a tax increase in 2026 to most Americans.
“Congress needs to act swiftly to take this threat of a tax hike off the table,” said U.S. Rep. Jason Smith, R-Mo., who chairs the powerful tax-writing House Ways and Means Committee.
While Republicans want to extend the lower income tax rates, larger standard deduction and an array of other plans, this also is an opportunity for the GOP to make new tax changes — and Trump has proposed a number of them. His platform included eliminating taxes on tips, overtime pay and Social Security benefits, plus a tax deduction for interest on automobile loans.
But all of that costs money. Budget watchdog groups say the combination of renewing most of the 2017 Trump tax cuts — plus the new tax cut plans he campaigned on — could have a price tag of nearly $8 trillion over 10 years.
It should be noted that Trump’s repeated call for Congress to enact dramatic tariffs on imports — to offset the cost of his tax cuts — has not gained any traction in the House or Senate.
One problem for Republicans is that a big tax package gets complicated quick, drawing an army of well-heeled lobbyists to the halls of Capitol Hill — known by the nickname of “Gucci Gulch” from the tax fights of the Reagan years.
In 2017, it took the GOP Congress the whole year to hash out the fine print of Trump’s tax plan. Republicans don’t want a repeat in 2025, worried that GOP infighting, especially among House conservatives, could derail the entire effort.
It’s one reason Trump has been pushing Congress to raise the nation’s debt limit, concerned that his party’s fiscal hawks might limit some of his tax-cutting desires.
“I will keep your taxes low and your job numbers high,” Trump promised during the 2024 campaign.
That pledge seems simple enough. We’ll find out this year whether Republicans in Congress can follow through.
Jamie Dupree has covered national politics and Congress from Washington, D.C., since the Reagan administration. His column appears weekly in The Atlanta Journal-Constitution. For more, check out his Capitol Hill newsletter at jamiedupree.substack.com
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