CRFB leader: Tax policy may not be a Trump administration high priority

Tax policy may not rank as high a priority for the incoming presidential administration as once thought, the president of the nonpartisan Committee for a Responsible Federal Budget said Monday at the opening of the 2024 AICPA & CIMA National Tax Conference.

“I will tell you that from where the Trump administration is starting to look at things — from what I understand — tax policy is not nearly as central to the agenda as I would have thought it would be,” Maya MacGuineas told conference attendees. “It’s absolutely moving. It’s going to be a huge issue, but it’s wrapped up in a whole lot of other things, which is how to spur economic growth.”

And the talk about spurring that growth focuses on undoing regulations and on energy policy, said MacGuineas, whose organization focuses on lowering the national debt, which was $33 trillion as of September 2023.

Based on President-elect Donald Trump’s campaign promises, MacGuineas said, his proposals would add $7.75 trillion to the national debt over the next decade. The bulk of that, $5 trillion, comes from extending the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, she said.

But the TCJA may not end up being the focus of the new administration’s tax policies, she said. During the campaign, Trump seemed more focused on eliminating taxes on various income, including tips, overtime, and Social Security, she said. And those proposals will run up against traditional congressional tax policy, she said.

Taxes on Social Security income also fund Social Security, she said. And Social Security is on track to be insolvent in nine years, meaning benefits would be cut 23% across the board if no action is taken. Trump’s proposal would cut that timeline to six years, she said.

MacGuineas said that decreasing the debt comes down to “the same old thing that we’ve needed to do for past decades, which is raise taxes and cut spending.”

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.