How Your 2025 Tax Returns May Look Different

And as inflation cools in the month of January and housing costs lower, how is the state of the economy? Joining us now is Grover Norquist, President of Americans for Tax Reform. Grover Norquist, thank you so much for joining. Good to be with you. Grover, inflation easing in the month of January. New numbers out and it appears gas prices, housing costs are dropping the most. How would you sum up the state of the economy for the American people right now? Well, as you say, the cost of living is not growing as rapidly as it had been, 21 percent in four years under Biden. We're seeing a tremendous increase in investment. And that comes from the one big, beautiful bill, because you have 100 percent expensing for new investment. If you invest, you don't get taxed on the money that you invest because you don't have it. And when that earns more money and wages and corporate profits, then the government gets revenue. But it is a huge step forward to have full expensing made permanent. And that has really shot up the amount of investing. And that is where you get more productivity and more growth in the future. So we expect the larger, stronger growth to continue this next year, which is important for everybody, but also important to the election. Grover, now the Consumer Price Index, CPI, is the metric which ultimately measures the prices Americans are paying for day-to-day expenses. This now dipping to a five-year low, as you mentioned. That lines up with the start of the Biden administration and the tail end of the pandemic. What would you say accounts for the positive trend in this direction now? Well, for starters, we're not printing money. We're not as Biden was. And people can look ahead and see that we are looking, we've actually brought spending down in the last several budgets that were put together. The various appropriations that were just put forward is an $18 billion reduction. That's not a lot, but it's not growing leaps and bounds. It's beginning to slow down the growth. So that helps people feel comfortable that inflation won't come back. Inflation is a factor of how much money the government spends. It's not a function of whether you borrow, you have a deficit or not. How much do you spend? That's how much money the government takes out of the economy. They can take it out in borrowing, they can take it out in taxes, but it's gone. So you want to keep the total spending down. Grover, lastly, Americans starting to think about their tax returns for 2025. What do you think might be different about filing this year, especially with news that cuts, you know, with tax cuts as well as the new Trump accounts and everything else coming out of this administration? Tax refunds for last year's taxes, 2025, are up about 22 percent. That's what the Secretary of Treasury says. That's about $1,000 per household. It's $190 billion for the whole economy. And so people paid more in taxes than they needed to because they weren't paying attention when the Republicans said, when we said no tax on tips and when we said cutting taxes on seniors' income and we said full expensing, we didn't mean after the bill passes, which was June, July. We meant all year from the back to the beginning. So people paid too much in taxes. This year around, be sure and change your withholding so that you don't over withhold and you get to keep your own money all year. There's also the wonderful, it seems like a small thing, but I think years later we're going to come back and say it's a huge thing. And that is the Trump accounts for children. Anyone with children under 18 can set up a Trump account. You just have to show that you're an American citizen and how old your kid is now. And you can put $5,000 into that account every year to support your child and for your child to save that money. When they get to be 18, it turns into an individual retirement account. They can keep that going for health care, for a retirement account if they want to, to buy a house, to go to school, all of the things one normally saves for. And they can now continue to save. This is going to train an entire new generation on what capitalism is, on how the economy matters, and they'll start looking, when the Dow Jones is talked about on your TV show, when they do it. Now we're going to do the business stuff. Instead of going, I'm going to step out of the room while this goes on, they go, whoa, I have several thousand dollars in my own personal account. I may only be 10 or 12, but I know what it means when the economy grows. I greatly appreciate you joining us. Absolutely.