US Tax Outlook During Uncertainty
- Jerrod Aud
- Apr 19
- 3 min read
The world is experiencing an economic reconfiguration and completely unconcerned if you like it or not. While countries battle over tariffs, let’s take a moment to consider what’s affecting the current tax environment: IRS Layoffs and the potential expiration of Tax Cuts and Jobs Act.
Fox News recently reported that since the Tax Cuts and Jobs Act (TCJA) Federal tax revenue has increased by 50%. After reducing the tax brackets, introducing the Qualified Business Income Deduction (QBID), and increasing deductions & credits the U.S. has experienced a wave of economic growth, and it's being given credit for all those additional tax revenues.
Soon, those policies will expire, and many experts warn that it could stunt growth at a time when other policies already threaten to do so. Further talk of major tax code changes include the taxability of social security, tips, and even overtime. So, who is expected to bear the burden?
Corporation & high-income earners.
Tax Cuts & Jobs Act Expiration
If the policies from the Tax Cuts and Jobs Act expire the top tax bracket will move from 37% back to the 39.6% that it was before. Also, those who’ve been enjoying the 12% bracket will go back to the pre TCJA’s rate of 15%! Additionally, the corporate tax rate would be expected to jump from 21% to much higher!
The higher standard deductions that most American’s have enjoyed would drop back to less than half of what they are now. The child tax credit would also go from $2,000 back to the pre-TCJA credit amount of $1,000.
IRS Layoffs
In February the IRS laid off 6,000 of its workers. The layoff consisted primarily of probationary employees who have worked at the IRS for less than two years. Now, through an internal memo obtained by Politico and being reported by USA Today, The IRS is poised to reach up to a 40% reduction in its workforce! If this takes place, more than 100,000 people are expected to be let go. This is expected to be extremely stressing on an already overwhelmed tax service.
Source: USA Today, Crowley, Kinsey & Anderson, Zac. 4/16/25. IRS layoffs could leave workforce with 40% fewer staff: Reports.
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