The 2017 Tax Cuts and Jobs Act: Expiration and Proposed Extensions
The 2017 Tax Cuts and Jobs Act (TCJA) is set to expire, and Trump aims to make the income tax rate cuts and standard deduction permanent. This decision could maintain lower tax bills for many middle-class families. If the TCJA expires by 2026, most people would face higher taxes as income brackets revert, potentially causing individuals to jump to a higher tax rate without a raise.
Trump plans to keep the sizable standard deduction, which simplified taxes for many when the TCJA doubled it. Without this provision, more people would likely need to itemize deductions, potentially leading to more complexity during tax season.
The estate tax exemption, which doubled under the TCJA, is another point of contention. Trump’s vision would extend this generous exemption indefinitely, allowing wealthy families to pass significant wealth with reduced tax burdens. If this provision sunsets, the tax-free amount would decrease substantially.
Garrett Watson from the Tax Foundation notes that “62% of tax filers would see a tax increase if the law were to expire as scheduled,” highlighting the significance of these potential changes.
Critics’ Concerns
Critics argue that making the TCJA cuts permanent would significantly reduce government revenue. The Congressional Budget Office predicts an increase in the national debt by over $3.7 trillion in a decade.
Joseph Rosenberg at the Tax Policy Center points out that “Extending the TCJA would lower taxes by an average of $2,000 per household in 2026.” However, skeptics question whether the benefits disproportionately favor the affluent.
Businesses are also closely watching these developments, as maintaining lower corporate tax rates could impact their tax liabilities and overall economic outlook.
The debate continues on whether these tax policies foster long-term prosperity or prioritize immediate gains at the expense of future fiscal health. As Melanie Lauridsen from the American Institute of CPAs suggests, it’s “going to be an interesting year for taxes.”

New Tax Proposals and Constitutional Considerations
Social Security Benefits
Trump’s tax policy blueprint includes eliminating taxes on Social Security benefits. This could significantly impact seniors relying on these benefits as their primary income source. However, Charles Blahous from the Mercatus Center cautions, “Removing taxes on Social Security has complex ramifications, potentially hastening insolvency.”
State and Local Tax (SALT) Deduction
Another proposal under consideration is changing the cap on the State and Local Tax (SALT) deduction, currently limited to $10,000. Raising or eliminating this cap could provide relief for taxpayers in high-tax states, but economists like Kyle Pomerleau of the American Enterprise Institute warn it could increase federal debt and primarily benefit higher-income individuals.
Corporate Tax Rates for Domestic Manufacturers
Trump also proposes reducing corporate tax rates for domestic manufacturers to as low as 15%. This aims to incentivize U.S.-based production, spur economic growth, and potentially reduce the trade deficit. However, critics caution that such preferential rates could erode the broader tax base and trigger a race-to-the-bottom tax policy.
Economic Perspectives
Economists are divided on these strategies. Proponents argue for potential economic stimulus, while opponents see them as tilting toward corporate favoritism and lacking long-term sustainability.
Constitutional Considerations
These proposed changes raise important questions about their alignment with constitutional principles:
- How do these tax policies align with the principles outlined in the Constitution?
- What would the founding fathers think about these modern tax policies?
Trade and Energy Policy Proposals
Tariff Proposals
Trump’s economic strategy includes imposing new tariffs on imported goods, with a focus on specific nations:
- A proposed universal tariff of 20% on all imports
- An increased tariff of 60% on imports from China
These measures aim to protect U.S. manufacturing sectors. However, this approach could lead to retaliatory measures from affected countries, potentially resulting in a trade war.
Critics argue that such policies might harm U.S. exporters and consumers more than they protect local industries. Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics, warns of “protectionist domino effects” that could destabilize the global economy.
Green Energy Tax Credits
Trump plans to repeal green energy tax credits, a move that could reduce costs associated with previous clean energy policies. This decision may unburden certain sectors from regulatory pressures but could potentially dampen innovation and investment in renewable energy sources.
Environmentalists and industry leaders express concern that rolling back these credits may undermine progress in renewable energy deployment and environmental sustainability.
Economic and Environmental Considerations
Proponents argue that reducing government intervention could lead to a freer market and spur private investments. However, balancing economic outcomes with environmental commitments remains a complex challenge.
Constitutional and Philosophical Questions
These proposals raise important questions about the role of government in trade and energy policy:
- How do these ideas align with the constitutional principles of limited government and free markets?
- What would the founding fathers think about the government’s role in shaping these economic policies?

1. Tax Policy Center. Analysis of the Tax Cuts and Jobs Act. 2018.
2. Congressional Budget Office. Budget and Economic Outlook: 2018 to 2028. 2018.
3. ProPublica. The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax. 2021.
4. Joint Committee on Taxation. Estimating the Economic Effects of the Tax Cuts and Jobs Act. 2021.
5. Brookings Institution. Did the 2017 tax cutโthe Tax Cuts and Jobs Actโpay for itself? 2021.