The future of the Tax Cuts and Jobs Act (TCJA) of 2017 is under intense scrutiny as key provisions approach expiration in 2025. During a recent webinar, Venable professionals discussed the significant financial implications of extending the TCJA, estimated at $4.6 trillion. Of this, $3.7 trillion relates to individual provisions, including Section 199A deductions, which may not benefit corporate taxpayers as much. Panelists, including former Nevada senator and Venable partner Dean Heller, highlighted potential legislative efforts to address these expiring provisions, with Heller predicting an aggressive timeline to finalize new tax laws, potentially before the August recess. High-profile proposals include exempting tips from income tax and expanding the child tax credit, reflecting priorities popular among congressional Republicans.
Corporate taxpayers are facing heightened uncertainty, with discussions of raising the corporate tax rate from 21% to as high as 25% and potential changes to the SALT deduction. Walter Calvert, a partner in Venable's state and local tax practice, emphasized that while state-level SALT workarounds have provided relief in recent years, their future is unclear, as Congress deliberates over fiscal priorities. International tax rules are also in flux, with upcoming changes in 2026 tied to global tax standards, such as the OECD's Pillar Two, which could impact U.S. multinationals operating abroad.
Amid these debates, fiscal constraints loom large, with the national debt surpassing $36 trillion and interest rates significantly higher than in 2017. Panelists noted that the reconciliation process, which circumvents Senate filibuster rules, could be used to pass tax legislation but requires near-unanimous support within the House GOP. While the conversation reflected optimism about reaching agreements, challenges remain in balancing tax relief with revenue generation. The next steps will shape the tax landscape for individuals, corporations, and multinationals, setting the tone for years to come.
To learn more about upcoming webinars or watch past recordings from our series, Transition Outlook: What to Expect from the Second Trump Administration, click here. The weekly webinar series runs through March 2025.