Can tax cuts expire? Congress is in a high-stakes battle over the future of your tax bill. Over the next three weeks, lawmakers will be deciding whether to make the 2017 tax cuts permanent—or let them expire, leading to higher taxes for businesses and individuals across the board.
This isn’t just political maneuvering; it’s a decision that could have huge financial implications for you, your business, and the economy. Here’s everything you need to know about what’s happening, what’s at stake, and when we can expect a decision.
Where Tax Cuts Law Stand Right Now
The House and Senate are trying to finalize a budget resolution that lays the groundwork for keeping tax cuts in place. The House passed its version already, and now Senate Republicans are working through key changes before sending it back for a final vote.
One of the biggest debates is how to extend the tax cuts without adding to the deficit—at least on paper. Republicans are considering using a budget loophole, known as the “current policy baseline” gimmick, to make it seem as though extending these tax rates won’t count as a new cost. The idea is simple:
Under current law, the 2017 tax cuts are set to expire at the end of 2025.
The Congressional Budget Office (CBO) estimates that keeping them in place would “cost” $4.5 trillion over the next decade.
But that’s misleading—because those tax cuts are already the law. Saying they “cost” something assumes that raising taxes is the default and that keeping rates steady is an expense.
Despite Republican support for this loophole, it still needs to be approved by the Senate parliamentarian, who enforces the rules on what can and cannot be included in the budget process. If the parliamentarian rejects this move, things could get messy fast.
Key Timelines to Watch for these Tax Cuts
📅 Now – Mid-April: The Senate is negotiating changes to the House budget resolution. Lawmakers are meeting with the parliamentarian to see if their strategy will hold.
📅 End of April: The goal is for the House to vote on a compromise version of the budget resolution. If it passes, it moves to the Senate.
📅 Early Summer: If the Senate signs off, the full budget reconciliation process kicks in, leading to a potential final vote.
📅 By August? Some in the Senate want to push this fight until later in the summer, but House Speaker Mike Johnson has said that’s far too late. Johnson wants the issue resolved as soon as possible to provide certainty to businesses and taxpayers.
📅 Before the End of 2024: If Congress doesn’t act, the 2017 tax cuts will expire at the end of the year, raising taxes across the board in 2025.
What Could Go Wrong?
The biggest threats to keeping tax cuts permanent come from within the Republican Party itself:
1️⃣ Senate Republicans Divided – Some GOP senators, including Thom Tillis (R-NC), have reservations about bending the rules. They refuse to override the parliamentarian if the loophole is rejected. Without full Republican support, the bill’s chances shrink.
2️⃣ House Hard-Liners – The House Freedom Caucus and other conservatives want additional spending cuts before agreeing to extend the tax cuts. If their demands aren’t met, they could block the deal.
3️⃣ Senate Filibuster Risks – While the budget reconciliation process allows tax cuts to pass without a 60-vote majority, it still has strict rules that must be followed. If even a few Senate Republicans break ranks, the process could fall apart.
Why This Matters for You
If Congress fails to extend these tax cuts, your taxes will go up in 2025. Here’s what that could mean:
Individual tax rates would increase, meaning you keep less of your paycheck.
The standard deduction would shrink, reducing how much income you can shield from taxes.
Small business tax breaks would disappear, making it harder for business owners to reinvest and grow.
The child tax credit would drop, meaning less financial relief for families.
Stay Updated with Real-Time Tax Law Changes
This fight is far from over, and we’ll be tracking every move Congress makes. If you want real-time updates on tax law changes that could affect you, subscribe to our YouTube channel where we break everything down in easy-to-understand videos.
We’ll keep you posted as this unfolds!