Temporary Provisions in Tax Bill

The current versions of the draft tax legislation contained in the GOP’s “one big, beautiful bill” contains several new tax code provisions that, if passed into law, would expire after 2028. For example, both the above-the-line deductions for qualifying tip income and overtime income would only be available through 2028, and the enhanced standard deduction for lower-income seniors would also expire after 2028. Similarly, the newly created above-the-line deduction for auto loan interest would only be available for tax years 2025 through 2028.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the decision to make many of the new tax relief provisions in the draft tax legislation temporary.

Below is a summary of the debate that ensued between the two professors.

Their Votes:





Their Reasons:

Byrnes: Making these important tax provisions temporary does not mean that they will expire after 2028. The no tax on tips or overtime provisions, the enhanced standard deduction and enhanced tax credit for older Americans, for example, are all set to expire just after the next presidential election. We see tax provisions that are initially made temporary become extended over time even if they were initially temporary in nature—we should, of course, remember that nothing in the tax code is ever truly “permanent”—everything is subject to change even if not initially set to expire.

Bloink: What the Trump administration and Republican-controlled Congress are doing is setting us up for a massive tax cliff right around the next presidential election in 2028. This seems to be a calculated political move rather than any smart policy-related decision. When these types of tax provisions are made temporary, it creates a tremendous amount of uncertainty for the middle-class taxpayers who rely upon their benefits.

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Byrnes: Sometimes when we introduce new provisions into the tax code, we make them temporary as a way to evaluate their real-world effectiveness. By no means do these important tax cuts automatically have to expire after 2028--Congress always has the ability to extend them or even make them permanent if they're having the desired impact on our economy.

Bloink: Making these new tax cuts for the middle class temporary--while making the 2017 tax cuts that primarily benefit the wealthy permanent--is patently unfair to the working class. It also creates the illusion that Trump is actually following through on campaign promises--while these working-class tax cuts won't really provide their promised benefits because of the brief window for their availability.

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Byrnes: Making these provisions temporary now allows us to satisfy the budgetary restrictions in terms of scoring the impact of the legislation on the national deficit. Getting the overall tax legislation signed into law should be our top priority. Making certain provisions temporary initially both serves the purpose of allowing us to evaluate their effectiveness and reducing the overall cost of the legislation.

Bloink: If these new tax cuts are smart tax policy--and I'm not saying they are, as drafted--there's no reason to make them temporary, aside from manipulating the appearance of the impact this bill would have on the long-term deficit. Yes, we all understand the spending constrictions that must be applied in order to get this bill signed into law. What the GOP has done here is found yet another way to favor billionaire taxpayers at the expense of the working class.