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1 Erica York, et al., Options for Navigating the 2025 Tax Cuts and Jobs Act Expirations 1 (2024)

handle is hein.taxfoundation/opnsfnvg0001 and id is 1 raw text is: *%TAX FOUNDATION Options for Navigating the 2025 Tax Cuts and Jobs Act Expirations Erica York Senior Economist, Research Director Alex Durante Economist Huaqun Li Senior Economist Garrett Watson Senior Policy Analyst, Modeling Manager Will McBride Vice President of Federal Tax Policy & Stephen J. Entin Fellow in Economics May 2024 Executive Summary Policymakers should have two priorities in the upcoming economic policy debates: a larger economy and fiscal responsibility. Principled, pro-growth tax policy can help accomplish both. Congress is staring down the expiration of the Tax Cuts and Jobs Act (TCJA), and Tax Foundation is pre- pared to provide insight and analysis on the policies at stake. Since its enactment in 2017, the Tax Foun- dation team has studied the TCJA's underlying construction and resulting strengths and weaknesses. We have also analyzed fundamental reforms that would dramatically improve the U.S. tax system to support economic growth as well as greater efficiency and simplicity. Whether lawmakers target fundamental tax reform or follow the outline of the TCJA, they will confront decisions on what to prioritize in this forthcoming round of tax reform. In that regard, staying within the overall TCJA construct, the Tax Foundation team has analyzed difficult, but revenue-neutral ways to build a pro-growth set of reform options that would not significantly worsen the deficit once changes to the econ- omy are considered or substantially change the distribution of the tax burden across the income scale. The alternative reform options outlined in this paper may not be politically popular, but they would grow the economy and provide sufficient revenue to avoid significantly increasing our nation's debt. The two alternative options would further broaden the tax base for individual income (more so than the TCJA), maintain much of the individual rate cuts from that law, improve the business tax base to support invest- ment, and maintain the corporate tax rate of 21 percent. The Tax Foundation is the world's leading nonpartisan tax policy 501 (c)(3) nonprofit. For over 80 years, our mission has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity. TAX FOUNDATION 1325 G STREET, NW, SUITE 950, WASHINGTON, DC 20005 202-464-6200 1 laxfoundation.org