When Americans go to the polls in November, they will be deciding the playing field for the biggest battle in memory over the direction of U.S. fiscal policy.

The big picture: Major provisions of former President Trump's 2017 tax law expire at the end of 2025, meaning taxes would go up for most Americans if no new bill is passed. Neither party wants to let that happen in its entirety — but Democrats and Republicans have radically different visions of what the tax code should look like in 2026 and beyond.

Why it matters: Control of the White House, Senate and House will determine who holds the best cards in negotiations to extend the Tax Cuts and Jobs Act (TCJA). The legislation that results will decide the outlook for U.S. public debt, and where the burden of paying for government falls.

• "Doing nothing means you go over a cliff," Zach Moller, director of centrist think tank Third Way's economic program, tells Axios. "It is an action-forcing mechanism."

Driving the news: While the 2025 expiration has been common knowledge among the tax policy set for seven years now, in recent weeks there have been new signs in Washington of battle lines being formed and interested parties — which is pretty much everyone — jockeying for position.

• Trump pledged to cut taxes further if elected, saying at a rally earlier this month: "I'll give you a Trump middle class, upper class, lower class, business class big tax cut."
• Top White House economic adviser Lael Brainard laid out the Biden administration's approach should the president be re-elected, which is to extend the Trump tax cuts for households making under $400,000 while offsetting the cost by raising taxes on the highest earners and large corporations.

The TCJA made a slew of changes to the tax code. One big one was to cut the corporate income tax rate to 21%, from 35% — though that provision does not expire (more on this below).

• Most provisions affecting households are due to end, however, including a reduction in marginal tax rates (the top bracket, for example, would revert to 39.6% from its current 37%).
• Other expiring provisions include an increase in the standard deduction, a cap on the deductibility of state and local taxes, and a reduction in the estate tax.

By the numbers: The Congressional Budget Office's new projections earlier this month found that fully extending the TCJA would add more than $4 trillion to cumulative fiscal deficits over the next decade.

• The Committee for a Responsible Federal Budget calculates that this would push the national debt to 132% of GDP by 2034, compared to 116% in the CBO's baseline scenario in which the tax cuts are allowed to expire.
• CRFB notes in a piece out today that the deficit impact of extending the tax cuts has risen 50% since early estimates were made in 2018.

Whatever the political dynamics of 2025, the economic backdrop is radically different than it was when TCJA was first enacted.

• Then, inflation and interest rates were low, and there was little apparent cost to cutting taxes without spending cuts.
• Now: "The state of the macroeconomy with high interest rates and higher inflation means that a bad outcome on deficits in 2025 would be extra bad for the economy," said Moller. "That needs to be something that weighs on the policymakers."

If the 2024 elections result in a Republican trifecta — Trump winning back the White House combined with Republicans holding the House and winning the Senate — there are still open questions about what form a TCJA extension could take.

• That's because there is something of a trilemma at play — three competing considerations that different members of the Republican caucus and factions within a future Trump administration weight differently.

Do you focus on maximizing favorable tax policy for corporations, which supply-siders advocate as a way to spur growth and investment? Or do you focus on reducing taxes on the middle class, as an emerging populist wing of the party — more hostile to big business than traditional Republicans — advocates?

• Some Congressional Republicans are even open to raising the 21% corporate income tax rate, House Ways and Means Committee chair Jason Smith has said.
• Meanwhile, both goals conflict with reducing the deficit, which is a staple of Republican rhetoric.
• "At a high level, the tension is straightforward," says Jon Lieber, managing director at the Eurasia group and a former Senate Republican aide. "Extend as much as you can without triggering a debt crisis."

In the event of a Democratic trifecta, there is a detailed proposal that would amount to President Biden's opening bid, released as part of his budget proposal.

• The Treasury "Greenbook," describing the president's preferred tax policies, focused on raising revenue from the rich and corporations.
• It would, among many other provisions, include a 25% minimum tax on billionaires and raise the corporate income tax to 28% from the current 21%.
• Given the likelihood of narrow congressional majorities, however, Biden's fiscal ambitions would likely be hemmed in by centrist members of the Democratic caucus, as they were in the first two years of his presidency.

The most interesting scenarios involve a divided government. If Biden were to be re-elected but Republicans win one or both houses of Congress, for example, the president would need to decide how aggressively to engage in brinkmanship.

• Would he be willing to allow the tax cuts to expire entirely — in contradiction of his pledge not to raise taxes on households making under $400,000 — to try to force concessions from congressional Republicans?
• In an inverse of that scenario, with Trump winning the presidency but Democrats capturing the House, the House Democrats would have leverage to demand an extension package more to their liking than Trump and Republicans would prefer.

Left-of-center groups are pushing Democrats to embrace that potential power, arguing that they would hold the cards even in a divided government.

• "Democrats hold a lot of leverage because the law was written in such a way that if nothing is done, if no deal is agreed to, then those provisions that Democrats opposed in 2017 and oppose today" will expire, Igor Volsky, executive director of Groundwork Action, tells Axios.
• "Our goal is to plant the flag and say 'we're going to be expecting you to really fight for the principles that you talk about on the campaign trail,'" he added.

The bottom line: Elections matter, and this one will shape the contours of U.S. fiscal policy — and who pays what at tax time — in a very immediate, concrete way.