What Happens if the 2017 Tax Cuts Expire?

capitol hill behind the american flag

What Happens if the 2017 Tax Cuts Expire?

Understanding the Financial and Economic Implications: Explore the Costs, Benefits, and Potential Impacts of Letting the 2017 Tax Cuts and Jobs Act Provisions Expire

The 2017 Tax Cuts and Jobs Act (TCJA) introduced sweeping changes to the U.S. tax code. However, several key provisions under the TCJA are set to expire by 2026. If Congress does not act, taxpayers and the economy could face significant changes. Let’s dive into what this could mean for individuals, businesses, and the overall fiscal landscape.

Key Provisions Set to Expire

The TCJA temporarily reduced individual income tax rates, expanded the standard deduction, and doubled the child tax credit. These provisions, among others, were designed to boost disposable income and stimulate economic growth. But these benefits were temporary, with an expiration date scheduled for 2026. Once they expire, tax brackets will revert to pre-TCJA levels, potentially increasing tax liabilities for most households.

The Financial Impact of Expiration

According to the Congressional Budget Office (CBO), allowing the TCJA’s individual tax cuts to expire would generate over $3.5 trillion in revenue by 2033. This could help reduce the national deficit and stabilize federal debt. However, higher taxes on individuals and businesses could have ripple effects. Reduced consumer spending and investment may slow economic growth.

For families, this could mean smaller paychecks and less disposable income. For businesses, higher tax rates could curb hiring and expansion plans. While the additional revenue would benefit the federal budget, the trade-offs for households and companies could be substantial.

Economic Consequences

Higher tax rates may discourage work, savings, and investments. The TCJA’s provisions aimed to incentivize these activities. Their expiration could lead to slower GDP growth. Additionally, businesses may delay investments due to uncertainty over future tax policies.

On the other hand, increased tax revenue could fund vital programs, including healthcare, infrastructure, and education. Policymakers will need to weigh these competing priorities carefully.

Who Will Be Most Affected?

Middle-income households could see the largest tax increases. Many benefited from the expanded standard deduction and child tax credit. Small businesses operating as pass-through entities would also face higher tax bills. High-income earners might see their marginal rates rise significantly. These changes highlight the importance of planning for potential tax increases now.

What Can Taxpayers Do?

Proactive tax planning is essential. If the TCJA provisions expire, taxpayers should consider:

  1. Reviewing their financial plans with a tax professional.
  2. Exploring tax-advantaged accounts like IRAs and HSAs.
  3. Maximizing deductions and credits before the changes take effect.
  4. Staying informed about legislative updates.

Why This Matters

The expiration of the TCJA provisions isn’t just a matter for policymakers. It will impact millions of Americans and businesses. By understanding the potential consequences, taxpayers can take steps to minimize their financial burden.


Tax professionals, streamline your workflow with iFindTaxPro’s tools! From onboarding to compliance plans, TaxMan research, and more, we’ve got you covered. Sign up now for a free trial and a 15-minute demo at www.ifindtaxpro.com and see how we can transform your practice today! Our resource directory also offers valuable links to assist in managing various financial and legal aspects of a business or individual.

Picture of iFind Taxpro

iFind Taxpro

Ask a question

Data security and privacy are our topmost priorities. Your personal details will not be shared publicly.

Required fields are marked *

related