The 2024 election has the potential to be one of the most consequential for the American tax system in recent memory.
This is largely due to the sunsetting provisions of the 2017 Tax Cuts and Jobs Act, which will either expire and revert to their pre-TCJA rules or will be replaced by new legislation — making who wins what on Nov. 5 especially critical.
“The conversation will change once we understand the balance of power heading into the 119th Congress,” said Kasey Pittman, director of tax policy at the Washington tax council practice of Top 10 Firm Baker Tilly. “We’ll be able to be a little bit more focused on potential outcomes.”
For example, research and experimental deductions are certainly on the table, according to Pittman. “We saw pervasive support for that in a bipartisan bill in the House at the beginning of the year,” she said. “The vote tally was 374 for the bill, and 70 against. The bill included three TCJA provisions that have already changed or begun to sunset — the Section 174 deduction, the calculation of [adjusted taxable income] for the Section 163(j) limitation, and the phaseout of bonus depreciation.”
Alex Wroblewski/Bloomberg
The bill failed in the Senate but not due to lack of support for the business provisions, according to Pittman.
“There was some politics involved. For example Senator Crapo, believing that Republicans will have more leverage after the 2024 election, didn’t wish to provide as much support for changes to the Child Tax Credit as the bipartisan bill called for. The stumbling block in the Child Tax Credit wasn’t the top line amount of the credit, but the refundability of the credit,” she said. “I think there’s just an ideological difference between the parties on how the credit should function.”
The TCJA was passed in late 2017 and took effect in 2018, Pittman observed, and the circumstances of its passage had important ramifications.
“It was passed using reconciliation, which takes the use of the filibuster off the table in the Senate but comes with certain restrictions, including revenue restrictions within the budget window and an inability to increase the federal deficit outside of the budget window,” Pittman explained. “Republicans weren’t able to fit all of their priorities into these parameters permanently, so some provisions were made temporary. The corporate tax rate, which was what I consider the headline of the tax bill, was made permanent, but a lot of other provisions, including the individual rate cuts, were temporary and will expire at the end of 2025.”
“The Child Tax Credit was increased from $1,000 to $2,000,” she continued. “Personal exemptions were eliminated, and itemized deductions changed to include the SALT cap. Less of a factor will be the sunset of the increased estate tax exemption. But overall, there is no individual taxpayer in the United States who will not be affected by the Tax Cuts and Jobs Act expirations.”
Although it’s not talked about as much, there is a bipartisan consensus in that Democrats also would like to extend tax cuts — the TCJA or an equivalent regime, according to Pittman.
“We haven’t seen the detail for taxpayers making under $400,000 and that’s the vast majority of taxpayers,” she said. “So I think there is alignment in that Democrats and Republicans don’t want to see tax increases. They don’t want the TCJA to sunset for taxpayers making under $400,000 a year. The parties diverge on cuts for those making over $400,000.”
Wealth and gains
There is currently much misinformation going around regarding the taxation of unrealized gains, according to Pittman. There was an example on TikTok that suggested that if you buy a house for $200,000 and its value increases to $400,000, you have to fork over $50,000 on the $200,000 appreciation. “That’s just not the case, so we’re combating misinformation here.”
There are actually at least three proposals for a wealth tax, according to Pittman. Sen. Ron Wyden, chairman of the Senate Finance Committee, has one proposal, Senator Elizabeth Warren has a separate proposal, and the Biden Fiscal Year 2025 Green Book, which vice president and presidential contender Kamala Harris has said she supports, has a third.
“All three of these proposals are different,” said Pittman. “But we don’t think it’s likely that this will become law, and here’s why: First, there would need to be a Democratic sweep, and the math in the Senate isn’t supportive of that. There are 33 normal seats and one special election, so there are 34 seats up for election. Of these, 23 are Democratic seats and only 10 are Republican seats. So Democrats have to defend more than double the number of seats than Republicans do, and we already know that Sen. Joe Manchin’s seat is very, very likely to flip. So if you flip Sen. Manchin’s seat, that means Democrats have to defend every single other seat, just to wind up with a 50-50 split in the Senate. And almost all of the toss-up or competitive states currently have Democratic incumbents. And even with a Democratic sweep, it would still be necessary to get everyone on the same page, and not every Democrat has voiced support for such a tax.”
Moreover, if they were successful in passing a wealth tax on unrealized appreciation in assets, it’s very likely to face a challenge from the right.
“A recent Supreme Court decision was ultimately silent on whether there needs to be a realization to have a tax,” Pittman said. “Four justices noted that they believe that there is a realization requirement, one justice noted that she does not believe there is such a requirement, and the other four justices were silent. So the likelihood of it being enacted and then withstanding challenges seems very low.”
David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, agreed that there is likely to be at least a split Congress, with Republicans taking control of the Senate. He believes that the Republicans are likely to win both West Virginia and Montana, giving them control of the Senate. This will limit the size and level of tax increases if it happens. The current statutory rate on domestic corporate income is 21% — down from 35% in 2017 — but the total effective tax rate paid by the typical S&P 500 company is 19%. Although many of the individual cuts will sunset in 2025, the corporate rate will not change.
Looking back at the TCJA in 2017, Wagner said that the S&P 500 rallied by the same amount as the earnings boost it received. From November 2017 to January 2018, the market rallied 10%, as earnings were expected to get a one-time boost of 11%. This suggests that it is too early to make a tangible investment call solely due to taxes.
The National Treasury Employees Union, which represents workers at the Internal Revenue Service among 37 federal agencies and offices, has asked a federal judge for emergency relief to preserve the union rights of federal employees while NTEU’s legal challenge to President Trump’s executive order stripping unions of collective bargaining rights can be heard in court.
Trump signed an executive order last Thursday removing the requirements from employees at agencies including the Treasury Department that he deemed to have national security missions. On Monday, the NTEU filed a lawsuit to stop the move arguing that Trump’s rationale for protecting national security was just a way to end union protections for federal workers. The administration also wants to prevent the unions from collecting dues automatically withheld from employee paychecks.
“NTEU seeks emergency relief to protect itself and the workers it represents from this unlawful attempt to eliminate collective bargaining for some two-thirds of the federal workforce,” the request stated.
The NTEU contended that the Trump administration’s executive order claims that allowing workers to join a union was a threat to national security were absurd.
“We all know this has nothing to do with national security and that the true goal here is to make it easier to fire federal employees across government,” said NTEU national president Doreen Greenwald in a statement Friday. “Just five days after declaring the administration would no longer honor our contract with Health and Human Services, thousands of brilliant civil servants who work tirelessly to improve public health were let go for spurious reasons and little recourse to fight back.”
The union pointed out that Congress declared 47 years ago that collective bargaining in the federal sector was in the public’s interest by giving employees a voice in the workplace and allowing labor and management to work together. It acknowledged there is a narrow exemption in the law for groups of employees whose work directly impacts national security, but argued that Trump’s executive order is blatant retaliation against federal sector unions and ignores the laws passed by Congress creating the agencies.
In agencies where a reduction-in-force has been announced, NTEU’s contracts provide time for employees to respond to a RIF notice and explore alternatives to mitigate the impact of the layoffs.
Earlier this week, after two court rulings in California and Maryland, the IRS’s acting commissioner, Melanie Krause, announced the IRS would be bringing back approximately 7,000 probationary employees who had been fired and then put on paid administrative leave.
A bipartisan bill has been introduced in Congress to preserve collective bargaining rights for federal employees. The Protect America’s Workforce Act (H.R. 2550), sponsored by Rep. Jared Golden, D-Maine, and Brian Fitzpatrick, R-Pennsylvania, would overturn Trump’s executive order stripping collective bargaining rights from hundreds of thousands of federal workers at multiple agencies. Separately, eight House Republicans and every House and Senate Democrat have sent letters to the White House condemning the executive order.
The political calculus involved with the details of estate planning next year and beyond may be distracting financial advisors and clients from a larger, simpler conversation, one expert says.
On the off chance that the federal estate-tax exemption levels of $13.99 million for individuals (and double for couples) revert to half those amounts when Tax Cuts and Jobs Act provisions expire in 2026, only 0.2% of households would face potential duties upon transfer of assets, according to Ben Rizzuto, a wealth strategist with Janus Henderson Investors‘ Specialist Consulting Group. He predicted that most financial advisors and high net worth clients, such as those he works with and others across the industry, will see no changes.
With few other revenue-raising provisions available to President Donald Trump and Republican lawmakers, they’re not likely to shield all estates from payments to Uncle Sam — as much as they might like to play undertaker to the “Death of the Death Tax,” Rizzuto said, using the label for estate taxes adopted by critics favoring bills like the “Death Tax Repeal Act.” Lawmakers’ decisions on future exemptions from the taxes (and when they make those decisions) remain out of advisors’ control. Meanwhile, they must remind clients that estate planning is much more than having a will and avoiding taxes, Rizzuto said.
“For financial advisors and clients, I would expect for many of them not to have to worry about federal estate taxes next year,” he said in an interview. “Even though they may not have to worry about it, there are still a lot of good conversations to be had.”
Trust tools that reduce the value of the assets that will transfer to spouses or other beneficiaries upon a client’s death, combined with the available statistics about the shrinking share of estates subject to taxes, could bring some peace of mind to clients. The 2017 tax law itself pushed down estate tax liability as a percentage of gross domestic product to a quarter of its 2001 level, according to an analysis by the “Budget Model” of the University of Pennsylvania’s Wharton School. Just two years after the law’s passage, the number of taxable estates had plummeted to 1,275 — or 1% of the number at the beginning of the century.
At the same time, advisors could raise any number of questions with clients about their estates that involve varying degrees of expertise and collaboration with outside professionals. And many surveys have found that clients are expecting them to do so. For example, at least 70% out of a group of 10,000 adults contacted in January by WeAreTalker (formerly OnePoll) on behalf of online legal information service Trust & Will said advisors should offer estate planning. In addition, 40% of the group said they would switch to an advisor who provided that service.
“We’re seeing a fundamental shift in client expectations,” Trust & Will CEO Cody Barbo said in a statement. “The findings are clear. Advisors who fail to integrate estate planning into their practice aren’t just missing an opportunity; they are facing a threat to their client base as wealth transfers to younger generations over the next two decades.”
In that context, advisors and their clients should steer clear of trying to make sense of a complicated, ever-changing flow of news from Capitol Hill as Trump and the GOP pursue major tax legislation with a year-end deadline, Rizzuto said. If clients truly could be on the hook for estate taxes, a grantor retained annuity trust, a spousal lifetime access trust or gifting strategies may eliminate the possibility. One method involved with the latter could set them up in the future to receive stock that is “highly appreciated with lower basis,” Rizzuto noted, citing the example of equities that have gained a lot of value that a client could give to their parents.
“Why not gift them upstream?” Rizzuto said. “My father holds it. I tell him, ‘Dad, you have to do these things: Live for another 12 months, make sure you don’t sell, make sure that you update your will or your instructions to gift it back to me when you die.’ That’s another idea that we’ve been talking about with advisors.”
From another perspective, these possible paths forward may beckon to clients this year, if they are tuning into Beltway news about the progress of the tax legislation, he said. To bypass the risk of client perceptions that their advisor isn’t doing any tax planning at all, Washington’s complex maneuvering around the future rules is, “if nothing else,” a “great opportunity for advisors to bring this up at a very high level,” Rizzuto said.
“Advisors will really need to go back to basics and have some foundational conversations with clients,” he said, suggesting their goals with taxes as one key point of discussion. “‘What is it that we actually control within your financial and tax plan?’ When it comes right down to it, it’s really just incomes and deductions.”
As technology continues to automate routine tasks, the role of finance professionals is evolving, demanding deeper capabilities in critical thinking, communication and business acumen.
Many of PrimeGlobal’s North American firms are focused on cultivating these skills in their future leaders. Carla McCall, managing partner at AAFCPAs, Randy Nail, CEO of HoganTaylor, and Grassi managing partner Louis Grassi shared their views with PrimeGlobal CEO Steve Heathcote on the need for future leaders to balance technological proficiency with human-centered skills to thrive.
AI is transforming the sector by streamlining workflows, automating data analysis and reducing manual processes. However, rather than replacing accountants, AI is reshaping their roles, enabling them to focus on higher-value tasks. In the words of Louis Grassi, AI can be seen as a strategic partner, freeing accountants from routine tasks, enabling deeper engagement with clients, more thoughtful analysis, and ultimately better decision-making.
Nail emphasized the importance of embracing AI, warning that those who fail to adapt risk being replaced by professionals who leverage the technology more effectively. HoganTaylor’s “innovation sprint” generated over 100 ideas for AI integration, underscoring why a proactive approach to adopting new technologies is so necessary and valuable.
McCall advocates for an educational shift that equips professionals with the skills to interpret AI-generated insights. She stressed that accounting curricula of the future must evolve to incorporate advanced technology training, ensuring future accountants are well-versed in AI tools and data analytics. Moreover, simulation-based learning is becoming increasingly crucial as traditional methods of education become obsolete in the face of automation.
Talent development and leadership growth
As AI reshapes the profession, firms must rethink how they develop and nurture their future leaders. To attract and retain top talent, firms need to prioritize personalized development plans that align with individual career goals.
HoganTaylor’s approach to talent development integrates technical expertise with leadership and communication training. These initiatives ensure professionals are not only proficient in accounting principles but also equipped to lead teams and navigate complex client interactions.
Nail underscored the growing importance of writing and presentation skills, as AI will handle routine tasks, leaving professionals to focus on higher-level analytical and decision-making responsibilities.
Soft skills are the success skills
While technical proficiency remains vital, future leaders must also cultivate critical thinking, communication and adaptability — skills McCall refers to as the “success skills.” McCall highlights the necessity of business acumen and analytical communication, essential for interpreting data, advising clients and making strategic decisions.
Recognizing teamwork and collaboration remain crucial in the hybrid work environment, McCall explained in detail how AAFCPA fosters collaboration through structured remote engagement strategies such as “intentional office time,” alcove sessions and stand-up meetings. Similarly, HoganTaylor supports remote teams by offering training for career advisors to ensure effective mentorship and engagement in a dispersed workforce.
McCall emphasized why global experience can be valuable in leadership development. Exposure to diverse markets and accounting practices enhances professionals’ adaptability and broadens their perspectives, preparing them for leadership roles in an increasingly interconnected world.
Grassi reminded us that an often-overlooked leadership skill is curiosity. In his view the most effective leaders of tomorrow will be inherently curious — not just about emerging technologies but about clients, market shifts and global trends. Encouraging curiosity and continuous learning within our firms will distinguish the true industry leaders from those simply reacting to change.
A balanced future
What’s clear from speaking to our leaders is PrimeGlobal’s role in fostering trust, community and knowledge sharing. McCall recommended member-driven panels to discuss AI implementation and automation strategies and share best practice. Nail, on the other hand, valued PrimeGlobal’s focus on addressing critical industry issues and encouraged continuous evolution to meet professionals’ changing needs.
The future of leadership in the accountancy profession hinges on a balanced approach, leveraging AI to enhance efficiency while cultivating essential human skills that technology cannot replicate, which Grassi highlights skills including leadership and building client trust.
As McCall and Nail advocate, the next generation of accountants must be agile thinkers, skilled communicators and strategic decision-makers. Firms that invest in these competencies will not only stay competitive but will also shape the future of the industry by developing well-rounded leaders prepared for the challenges ahead.
By investing in both AI capabilities and essential human skills, firms can not only future proof their leadership but also shape a resilient and forward-thinking profession ready to meet the challenges of the future.
As Grassi concluded, while technical skills provide the foundation, leadership in accounting increasingly demands emotional intelligence, empathy and adaptability. AI will change how we perform our work, but human connection, trust and nuanced judgment are irreplaceable. Investing in these human-centric skills today is critical for firms aiming to build resilient leaders of tomorrow. To remain relevant and thrive, professionals must prioritize developing strong success skills that will define the leaders of tomorrow.