Adam Michel’s post, titled “2026 Tax Increases in One Chart,” discusses the impending tax changes set to occur in 2026 due to the expiration of the tax cuts and reforms implemented by Republicans in 2017. The post includes a fantastic table summarizing the current policy, the automatic tax changes for 2026, and Michel’s recommendations for addressing these changes, all of which I agree with. (Here is the PDF version of his table).

You will see that the 2017 corporate income tax cut from 35 percent to 21 percent is permanent and thus not included in this table. Also excluded are changes that have already taken effect, like research-spending amortization and stricter limits on interest deductibility, which are also crucial considerations for any tax package.

These changes primarily affect individual taxes and are expected to result in an approximate $400 billion annual tax increase. Michel notes that there is broad bipartisan support to extend about three-quarters of these tax cuts.

He also reminds us that:

Congress also has a number of other fiscal policy deadlines in 2025 and 2026, which include the reinstatement of the debt limit and possible sequestration (EPIC has a nice summary of upcoming fiscal policy deadlines here).

In tackling tax reforms in 2025, Michel rightfully advises Congress to balance broader budgetary constraints with additional tax simplification and economic growth. Doug Holtz-Eakin also has a nice piece on how to pick and choose which tax provisions to extend or let go based on debt and economic growth considerations.

When I talked to Michel about his post, he noted that he hoped Congress would use any additional revenue, from things like eliminating itemized deductions, to further reduce marginal tax rates. As he wrote to me, “A fully fleshed out tax and spending package that addresses the pending tax increases should strive to bring spending into line with revenues and return any additional revenue to taxpayers through lower marginal rates.”

So let the battle begin.

Incidentally, the title says that the next fight will be both about taxes and spending, in large part because provisions like the child tax credit are mostly a way to spend through the tax code.