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Everyone loves to complain about taxes. Everyone thinks they pay too much in taxes. Everyone knows that the tax laws are excessively complicated and there is too much tax cheating with insufficient auditing and enforcement. The whole system is unfair and needs serious reforms.  

But tax reforms are not the tax issues that will be decided by this election. There are no campaign proposals to address the real problems with the tax system. What is on the ballot are two tax-related issues most people are not aware of or thinking about.  

One is that the 2017 Trump tax cuts will expire in 2025. This means the temporary parts, that helped most taxpayers, will end unless renewed. But the permanent parts, that gave large tax breaks to the wealthy and major companies, will continue.  

The other issue is the Republicans have a plan, called Project 2025, to totally change how our government works. Taxes are part of this agenda and, if enacted, will hurt most taxpayers.   The impact of both of these issues – who will be affected, by how much and in what way –  depends on who wins the presidency and which party takes control of the Congress.  

If Biden wins the election, and Democrats control the Senate and the House, we can expect some improvements in tax policies. There will be efforts to increase fairness in the system. There will be some tax increases on the wealthy and major businesses. The IRS will be allowed to go after the tax cheats. Perhaps some of the estimated $1 trillion in annual taxes not paid because of fraud, accounting manipulations and loopholes will be collected.  

If Biden wins but the Republicans control one or both houses of Congress, we can expect continuing gridlock on taxes and everything else. The dysfunction of the last two years in the Republican-controlled House will become the norm.  

If Trump wins but the Congress remains divided (or Democrats gain control of both houses) we can expect a lot of political wrangling but no positive action. The Republicans will continue to push for more tax cuts favoring the very wealthy. They will try to cut funding for all social programs, education, health care and other necessary public investments. Democrats will try to enact needed legislation but gridlock and inaction will be the most likely scenario.  

If Trump wins and the Republicans gain complete control of Congress, Project 2025 will be implemented, permanently enshrining trickle-down economics and totally changing how, and from whom, taxes are collected. These changes will not be good for the vast majority of people.  

If implemented, Project 2025 will result in major changes in every aspect of our society. Many commentators believe it will mark the end of democratic government in our country.  

Returning to the 2017 Tax Cuts and Jobs Act (TCJA) the Center on Budget and Policy Priorities (CBPP) documents that these tax cuts did not produce the promised results. The tax cuts did not pay for themselves with more economic growth. Businesses did not use the tax cuts to invest more and create jobs. The tax cuts fueled stock market speculation, made the rich richer and increased budget deficits and the federal debt..  

The Congressional Budget Office estimated the 2017 tax cuts will cost $1.9 trillion in a 10-year time frame. If all the TCJA tax cuts are renewed in 2025 it is estimated that $3.5 trillion will be added to the debt by 2035. This is $350 billion a year that could be paying for needed public investments instead of the bloated lifestyles of the wealthy. The CBPP says in 2025 the top 1% will receive $61,090 in average tax cuts while the bottom 20% will receive a mere $70.  

According to the Patriotic Millionaires website, since 2017, 109 major, large corporations paid $0 in corporate taxes in at least one year. The Government Accountability Office found that 34 percent of large, profitable corporations paid nothing in federal income taxes in 2018.   I

n 2017 Trump claimed the TCJA would increase average workers’ wages by $4,000. A 2022 study by the Federal Reserve says workers in the 90th percentile and below, on average,  experienced no wage gains at all. The top 1% did very well, especially when their investment incomes are counted.  

Tax avoidance is another objective of Republican tax policies. Republicans have opposed every effort to increase IRS audits. Between 2010 and 2020 the IRS budget was cut by 20%. As a result audits of millionaires fell by 70% and audits of large corporations fell by 50%. Reduced accountability for cheating reduces federal revenue and hurts the majority (85%) of honest taxpayers.

In the Inflation Reduction Act, Biden allocated $80 billion for tax enforcement despite Republican opposition.   Project 2025 will fundamentally change the tax system. It proposes reducing individual income taxes to two brackets (15% and 30%) and combining income and payroll taxes (Social Security and Medicare) to create one flat tax system. Corporate tax rates would again be reduced. Capital gains and dividends would be taxed at 15 percent. The estate and gift tax rate would be capped at 20 percent.   The proposal would shift to a consumption tax (a regressive sales tax) in two steps.

First, it would replace current tax law with the two-bracket flat tax and an unspecified standard. Most deductions and tax credits would be eliminated. The second step would be to abolish the income tax and IRS entirety, with states collecting the consumption (sales) taxes.  

The devil will be in the details which are sure to be stacked in favor or the very wealthy and large corporations. It is unlikely any of this will be good for 99% of taxpayers. Combining Social Security with other revenues will be especially bad for the vast majority of people.   Clearly this in not about a better or more fair tax system. This election taxes are on the ballot and if Republicans win most of us will suffer the consequences.

Sources: “The Cold Hard Facts about the TCJA” Patriotic Millionaires, April 25, 2024   “The Blueprint: The far right has a plan to remake America,” The American Prospect, November 27, 2023   “The 2017 Trump Tax Law Was Skewed to the Rich, Expensive, and Failed to Deliver on Its Promises,” The Center on Budget and Policy Priorities, March 5, 2024.