Congressional Report Highlights Looming Tax Increase for Individuals, not Corporations

July 27, 2022

Congress’s official bookkeeper projected on July 27th that the expiration of the individual provisions in the 2017 tax reform bill will be a tax increase for taxpayers but not for corporations.

“The most significant factor pushing up taxes in relation to income is the scheduled expiration, after calendar year 2025, of nearly all provisions of the 2017 tax act (P.L. 115-97) that affect individual income taxes,” the Congressional Budget Office stated in its report “The 2022 Long-Term Budget Outlook.”

The report continues:

The expiring provisions include lower statutory tax rates, the higher standard deduction, the repeal of personal exemptions, and the expansion of the child tax credit. The scheduled changes to tax rules after 2025 would cause tax liabilities to rise in calendar year 2026.

CBO's 10-year budget projection from May shows that total revenue from individual income taxes jump over $200 billion between 2025 (the year the tax cuts expire) and 2026 (the first year after expiration). By 2032, over a trillion dollars in additional tax revenue is collected from individual income taxes when compared to 2025.

The data also shows that revenue from corporate income taxes – where tax reform provisions were made permanent in the 2017 bill – decrease between 2025 and 2026. In 2032, corporations pay an aggregate $22 billion more in income tax when compared to 2025.

Certain lawmakers seek to extend the individual tax cuts that are set to expire in 2025. Other members of Congress would prefer extending only the tax cuts affecting low- and middle-income taxpayers and allow the breaks that benefit the wealthy to expire. The fate of the tax cuts lie in which political party will control Congress and the White House after the 2024 elections.  

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About the Author

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Jay Heflin

Legislative Director
Jay brings more than two decades of legislative experience to his job as Assistant Director of Tax Legislative Affairs in Eide Bailly’s Washington D.C. office. In his current position, Jay provides political intelligence and tax legislative guidance to the firm on the progress of tax legislation on Capitol Hill. Prior to joining the firm, he was a director at the tax lobbying shop Federal Policy Group, LLC, where he tracked tax legislation in Congress and participated in lobbying efforts to amend tax legislation. Before joining the Federal Policy Group, he was a Congressional reporter for several news organizations where his beat was tax policy. Prior to becoming a reporter, Jay worked as an accountant where he prepared several tax returns. He graduated from Butler University with a B.S. in Accounting.