Trump Tax Cuts: Extend or Expire?

And how would either move affect you?

Apr 29, 2025

80% of taxpayers benefited from tax cuts under Trump’s first-term plan
Average yearly tax savings were about $2,100 for those who benefited
Voters in swing districts currently favor renewing the Trump tax cuts 52%-36%

Find out how much it would cost you if the tax cuts are allowed to expire at the end of this year

As the clock ticks toward the end of 2025, the fate of the “Trump tax cuts”—formally known as the Tax Cuts and Jobs Act (TCJA) of 2017—hangs in the balance. The sweeping tax reforms, signed into law by President Trump in his first term, reshaped the U.S. tax code and delivered significant savings to American taxpayers and businesses.

There was widespread media misreporting ahead of the tax cuts. It wrongly claimed the changes would only benefit the rich and would cost the middle class.

However, the vast majority of taxpayers saw significant savings.

Now, key provisions are set to expire at the end of this year and Congress faces a high-stakes decision: extend the cuts, let them lapse, or chart a new course.

Read on for details.

Enacted in December 2017, the TCJA Trump tax cuts slashed tax rates across the board.

It reduced the corporate tax rate from 35% to 21% (a change now made permanent).
It lowered individual income tax rates.
It doubled the amount of the standard deduction.
It expanded the child tax credit.
It capped the state and local tax (SALT) deduction at $10,000.

When Congress passed the 2017 TCJA Trump tax cuts, major media outlets, including The New York Times, misreported their impact. The media often portrayed them as disproportionately benefiting the wealthy while harming middle-class families.

For instance, a 2017 New York Times analysis suggested that many middle-income families, particularly in high-tax states, could face higher taxes. However, these reports made math miscalculations, or downplayed or ignored the broader benefits, such as nearly doubling the standard deduction (from $12,700 to $24,000 for married couples in 2018) and lowering tax rates (15% to 12% for many middle-class earners), which actually resulted in tax savings for most households.

About 80% of taxpayers received a tax cut in 2018, while about 5% saw a tax increase. That’s according to the Tax Foundation in a report entitled, “A Preliminary Look at 2018 Tax Data," published July 19, 2019. The report analyzed IRS data. Additionally, the official GOP account stated that "90% of workers saw an increase in take-home pay" due to the changes in withholding changes.

Average yearly tax savings were about $2,100 for those who benefited, according to the National Taxpayers Union Foundation in 2018.

Today, it is widely accepted that the TCJA Trump tax cuts delivered substantial tax relief, particularly for lower- and middle-income Americans, with tens of millions of filers saving thousands of dollars annually.

Voters in swing districts currently favor renewing the Trump tax cuts 52%-36%, according to the Washington Examiner.

Here are charts comparing before and after income brackets and tax rates.

Time’s running out?

However, the law’s personal income tax cuts were designed to sunset or expire at the end of this year to comply with budgetary rules.

Americans will see higher tax bills starting in 2026 if Congress doesn’t act. Higher tax rates will hit all income brackets, and the loss of expanded deductions and credits could further strain household finances.

Renewal discussions are already underway, with Trump and some Republicans pushing to make the cuts permanent. Republicans who support that plan aim to pass a bill before the expiration date. National Economic Council Director Kevin Hassett has said he expects to finalize Trump’s tax agenda soon, with Republican House Speaker Mike Johnson targeting passage by Memorial Day. But that could be an ambitious timeline given disagreements inside the Republican Party.

Internal GOP disagreements focus on fiscal responsibility, policy scope, and political strategy. “Deficit hawks,” particularly in the fiscally conservative House Freedom Caucus, are demanding deep spending cuts by Congress. Right now, the House version of the budget blueprint requires $2 trillion in total spending cuts to make up for the cost of extending the tax cuts. The Congressional Budget Office estimates that would cost $4–5.5 trillion. Meantime, Senate Republicans are against the large spending cuts and want a permanent extension of the tax cuts. Cutting federal spending is never popular among the many groups that profit from the spending and those groups will have their say in the 2026 Congressional midterm elections by giving donations to the members who align with their interests and withholding from those who don’t.

Some House members criticize Senate plans for relying on “budget gimmicks” like a “current policy baseline” to mask true costs of cutting taxes. Some House members favor working in some of Trump’s new tax ideas, such as tax-free tips and no taxes on overtime—only temporarily.

The process of renewing the TCJA Trump tax cuts will likely take place through a complex parliamentary maneuver called “budget reconciliation.” That allows legislation, including the bills that take care of full budget and the extension of the tax cuts, to pass the Senate with a simple majority (51 votes) rather than the usual 60-votes that it takes. This strategy is central to Republican plans because it skirts Democratic opposition.

There is also, of couse, liberal opposition to extending the TCJA Trump tax cuts. The partisan Center for American Progress argues that the economic fallout from extending the cuts—such as increased deficits—could eventually offset any short-term gains, leaving households worse off. However, Democrats face a political bind: opposing renewal could be framed as supporting a tax hike, especially in swing districts.

The Washington Post has suggested bipartisan compromise might involve letting tax cuts expire for high earners only. NBC News reported it’s a notion some Republicans are reluctantly considering.

Meantime, some Republicans are exploring a “millionaire tax hike,” which could generate an estimated $400 billion over a decade, in order to pay for the new, additional tax breaks Trump has floated, such as the one that would eliminate taxes on tips, overtime pay, and Social Security benefits.

Republican House Speaker Johnson and Trump have rejected the idea of raising the top income tax rate. Trump has also indicated his tariff proposals are a way to replace a lot of taxes.