The biggest piece of tax legislation passed during Donald Trump’s presidency was the 2017 Tax Cuts and Jobs Act (TCJA), which increased the standard deduction, lowered corporate and estate tax rates and increased the child tax credit. Those cuts are set to expire at the end of 2025. If President Joe Biden defeats Trump in the 2024 election, he is unlikely to extend the cuts. How that will impact middle-class Americans in battleground states is open to debate.
Critics say the TCJA mainly benefited the wealthy by permanently reducing the corporate income tax rate from 35% to 21%. A recent blog on the Patriot Millionaires website cited a study from the Joint Committee on Taxation and the Federal Reserve Board, which found that workers below the 90th percentile in earning distribution – those who earned less than $114,000 in 2016 – experienced no wage gains from the corporate tax cut.
“Now, thanks to a new study from researchers at the Brookings Institution, University of North Carolina, and the American Enterprise Institute, we know that the TCJA also does not appear to have had much of an effect on investment growth,” according to Patriotic Millionaires.
Even so, the TCJA did have a positive tax impact on middle- and lower-income earners. One of its key features was reducing the marginal tax rates for most tax brackets. Those in the lowest tax bracket still pay 10% under the TCJA, but those in the second pay 12% rather than 15%. Those in the third bracket pay 22% instead of 25%, while those in the fourth bracket pay 24% rather than 28%.
When the Trump tax cuts do expire, here are the main ways middle-income Americans will be affected:
- Individual income tax rates will revert to their 2017 levels.
- The standard deduction (which many taxpayers take advantage of each year) will be cut roughly in half. The personal exemption will be returned, and the child tax credit (CTC) will be cut.
Much of the 2024 election focus is on seven battleground states that are expected to have a major impact because they are neither deep blue (Democrat) or deep red (Republican). Whoever wins most of these states could earn a ticket to the White House. If Biden turns out to be the winner, middle-class residents of these states – like all states – will feel an impact.
Determining that impact isn’t easy, though. The middle class tends to get hit hard when the economy stalls and gets a boost when the economy grows. In this regard, tax cuts have less of an impact than overall economic health – and the Biden economy has shown plenty of resilience in terms of GDP and job growth.
The Trump economy grew during his presidency’s first three years but was struck in 2020 by COVID-19. Since then, all seven battleground states have experienced economic growth under Biden – especially in 2023.
Here is how each state’s GDP has performed over the past seven years, according to data from Statista:
Arizona
- Leading industries: Real estate/rental/leasing; manufacturing; healthcare/social assistance
| Annual GDP Growth | |
| 2017 | +4.2% |
| 2018 | +4.0% |
| 2019 | +3.8% |
| 2020 | +0.8% |
| 2021 | +7.8% |
| 2022 | +3.2% |
| 2023 | +6.9% |
Georgia
- Leading industries: Finance/insurance; real estate/rental/leasing; professional/business services
| Annual GDP Growth | |
| 2017 | +3.4% |
| 2018 | +3.0% |
| 2019 | +3.3% |
| 2020 | +6.1% |
| 2021 | +6.1% |
| 2022 | +2.6% |
| 2023 | +5.0% |
Michigan
- Leading industries: Manufacturing; finance/insurance; real estate/rental/leasing
| Annual GDP Growth | |
| 2017 | +1.2% |
| 2018 | +2.3% |
| 2019 | +0.2% |
| 2020 | -3.0% |
| 2021 | +5.8% |
| 2022 | +1.6% |
| 2023 | +5.9% |
Nevada
- Leading industries: Lotteries/casinos/hotels; credit card issuance; hospitals
| Annual GDP Growth | |
| 2017 | +4.0% |
| 2018 | +3.4% |
| 2019 | +4.1% |
| 2020 | -7.4% |
| 2021 | +9.2% |
| 2022 | +2.5% |
| 2023 | +7.4% |
North Carolina
- Leading industries: Finance/insurance; real estate/rental/leasing; manufacturing
| Annual GDP Growth | |
| 2017 | +2.5% |
| 2018 | +1.8% |
| 2019 | +2.1% |
| 2020 | -0.6% |
| 2021 | +5.8% |
| 2022 | +2.0% |
| 2023 | +7.1% |
Pennsylvania
- Leading industries: Health/medical insurance; colleges/universities; drug/cosmetic/toiletry wholesaling
| Annual GDP Growth | |
| 2017 | +0.9% |
| 2018 | +1.3% |
| 2019 | +1.1% |
| 2020 | -4.7% |
| 2021 | +3.8% |
| 2022 | +1.0% |
| 2023 | +5.8% |
Wisconsin
- Leading industries: Life insurance/annuities; health/medical insurance; dairy product production
| Annual GDP Growth | |
| 2017 | +0.0% |
| 2018 | +2.2% |
| 2019 | +1.5% |
| 2020 | -3.2% |
| 2021 | +3.6% |
| 2022 | +0.4% |
| 2023 | +4.5% |
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