What you’re not hearing about extending the 2017 tax cuts

The Congressional Budget Office estimates that extension of the expiring provisions of the 2017 Tax Cuts and Jobs Act will cost – that is, will reduce federal revenues – by $4.6 trillion. The 21% corporate tax rate is permanent, but many provisions for individual taxpayers expire at the end of 2025. Revenues have cumulatively exceeded the CBO’s estimates at time of enactment by $340 billion. But they have fallen short of pre-enactment estimates by $402 billion. With variations like this, such estimates are little more than fantasies. What is not being reported is that tax hikes enacted in 2017 will expire too, which cut the other way in revenue estimates. The expiration of the cap on the deductibility of state and local taxes will cost $454 billion over 5 years, and $1.24 trillion over ten. With payers of SALT concentrated in large blue states, this will be a critical battleground for 2025 economic policy-making.