Here are some reasons why policy experts believe Trump's tax ideas may get "complicated" in 2025

Congressional lawmakers are set to soon discuss expiring tax breaks and new proposals from President-elect Donald Trump. However, reaching an agreement on cuts and spending could be a significant challenge.

With a majority in both the House of Representatives and the Senate, Republicans have the ability to pass major tax legislation through the “reconciliation” process, which bypasses the Senate filibuster. This means Republicans could initiate the budget reconciliation process during Trump’s first 100 days in office.

However, selecting priorities could prove difficult, especially with the growing federal budget deficit, according to policy experts who spoke at a Brookings Institution event in Washington on Tuesday.

Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, highlighted the complexity of the situation, emphasizing that legislators will be “representing their districts, not their party.” He added, “This is a lot more complicated than just the reds against the blues.”

‘Political divisions’ could pose challenges With a slim majority in Congress, Republicans will have to navigate negotiations among several factions within their own party, each with competing priorities.

One key issue is the Tax Cuts and Jobs Act (TCJA) enacted by Trump in 2017, which remains a priority for the next administration. Without action from Congress, several tax breaks from the TCJA are set to expire after 2025, including lower tax brackets, increased standard deductions, a more generous child tax credit, higher estate and gift tax exemptions, and a 20% tax break for pass-through businesses, among other provisions.

At the same time, Trump has proposed new ideas, such as eliminating taxes on tips, Social Security benefits for older adults, and overtime pay. He has also suggested ending income taxes, creating a deduction for auto loan interest, and lifting the cap on the federal deduction for state and local taxes. Additionally, Trump has advocated for universal tariffs on imported goods.

Molly Reynolds, a senior fellow at the Brookings Institution’s governance studies program, warned, “The more things you try to bring in, the more potential political divisions we have to navigate.”

Tax bill could take longer than anticipated Since the budget reconciliation process involves multiple stages, policy experts suggest the Republican tax bill could take several months to finalize.

Moreover, Congress has until December 20 to fund the government and prevent a shutdown. A stopgap measure could extend this deadline into January or March, potentially delaying Trump’s tax agenda.

Gleckman remarked, “The idea that they’re going to do this in 100 days is unrealistic. My over-under is Dec. 31, 2025, and that might even be optimistic.”

However, some experts believe the bill could pass by October 1, 2025, the end of the federal government’s fiscal year.

 

 

 

 

 

 

 

 

Paraphrasing text from "CNN" all rights reserved by the original author.