How control of Congress after the US midterm elections could affect your taxes and bills

The US midterm elections are on 3 November. As of 16 October, traders on Kalshi, a prediction market, gave Democrats a 90% chance of winning the House and 63% in the Senate. Cook Political Report’s 9 October ratings put Democrats at 224 to 234 House seats.

A majority needs 218. Democrats need a net gain of only three seats.

The Senate is harder. Republicans hold 53 seats there, and Democrats need four pickups. These are market prices and forecasts, not results, and they can change before polling day.


The new Congress is seated on 3 January. Until then, the present Republican majority is in charge.

Trump signed a stopgap funding bill on 2 September, but it only keeps the government running till 11 December.

This financial year began with a 43-day shutdown. So the next money fight will happen before any new members take their seats.

Income tax:

The One Big Beautiful Bill Act, signed on 4 July 2025, made many 2017 tax provisions permanent. For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers.

Deductions for tips (up to $25,000), overtime (up to $12,500), car-loan interest (up to $10,000) and a $6,000 extra deduction for people aged 65 and above run only till 2028. They are capped, income-linked deductions, not permanent tax exemptions. A deduction lowers your taxable income. It doesn’t make that income tax-free. The $40,000 cap on state and local tax deductions falls back to $10,000 in 2030.

Democrats have promised changes. Ben McAdams, the Democratic nominee in a Utah district, said extending the 2017 tax cuts could be the first thing his party takes up if it wins the House.

The Tax Policy Center estimates that reversing those breaks would raise taxes by about $860 a year for a middle-income household and $71,000 for the top 0.1%.

Even so, a Democratic House cannot change tax law on its own. A bill needs the Senate and the president’s signature. If Trump vetoes it, both chambers would need a two-thirds majority to override him.

Republicans have their own route if they keep control. In July, the House advanced a $95 billion framework covering defence, farm aid and voter ID rules, using a party-line budget process.

Senate leader John Thune put off a vote on it until the stopgap passed. That was the position in late July, and I haven’t seen a later update. A Democratic House would close this route.

Prices and premiums:

Tariffs are one place where Congress has handed the president most of the control. The Tax Foundation estimates that tariffs added about $1,000 to an average American family’s costs last year. In February, the Supreme Court ruled 6-3 that the emergency law behind most of them doesn’t allow tariffs.

The government replaced them within days. A 10% global tariff under a different law began on 24 February and was limited to 150 days. Congress did not extend it, and it expired on 24 July. That same day, new Section 301 tariffs of 10% or 12.5% took effect on 60 trading partners, covering about 99.4% of US imports.

Unlike the earlier tariff, these have no built-in end date.

Refunds on the struck-down tariffs can be claimed only by the importers who paid them, so ordinary shoppers won’t see that money.

On 22 July, Senator Ron Wyden introduced a bill that would require Congress to approve new tariffs, though Grant Thornton’s analysts called legislative action unlikely. A Democratic House could hold hearings and force votes. A binding limit would still need the president’s signature or a veto-proof majority.

Health insurance is the other pressure point. The enhanced Affordable Care Act tax credits ended in 2026, and KFF estimates monthly premium payments rose 58%.

McAdams says Democrats would try to renew them.

Trump has said he will sign only a health bill that sends money directly to people, which is not how the credits work today. Holland & Knight expects a Democratic House to push health affordability higher up the agenda, with funding bills as a key tool.

If Democrats win only the House, expect gridlock rather than new law.

Political scientist Larry Sabato said most of Trump’s proposals would probably fail in Congress if Democrats win a chamber.