Policy Backgrounders

The Administration’s FY25 Revenue Proposals

May 02, 2024

Trusted Insights for What’s Ahead™

The President’s Fiscal Year (FY) 2025 Budget included several major revenue proposals that the Administration estimates would increase tax revenues by $4.9 trillion over the next decade. This week, Treasury Secretary Janet Yellen testified to the House Committee on Ways and Means to advocate for the Administration’s proposals. Even as their passage is very unlikely this year, as Congress prepares to take up tax legislation next year with the expiration of key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), debates on raising revenue will come to the forefront of Congress’s legislative agenda.

• The President’s proposals affect higher income taxpayers (above $400,000) and corporations, with proposals to raise corporate tax rates, modify the treatment of capital gains, raise tax rates to fund Medicare, and decrease deductions related to compensation for high-income individuals.
• Secretary Yellen also defended the Administration’s economic record and recent investments to modernize the Internal Revenue Service. Republicans pushed back on this narrative and highlighted persistently high inflation and interest rates as reasons not to raise taxes.
• While it is very unlikely any of these proposals will be enacted this year, the hearing set up contentious debates on whether to maintain key provisions of the TCJA in 2025.