(The Center Square) – The sweeping Trump-era tax cuts in the Tax Cuts and Jobs Act of 2017 are set to expire next year, setting up the tax debate as a potentially key political issue this election year.
While illegal immigration and inflation top Americans’ list of concerns, both parties are increasingly talking about the Trump-era tax cuts, which President Joe Biden has said he will allow to expire next year.
President Donald Trump, meanwhile, has promised more tax cuts if elected.
“You’re all getting the biggest tax cuts because we’re doing additional cuts and a brand new Trump economic boom like you’ve never seen before,” Trump told supporters at a South Carolina rally in February.
As The Center Square previously reported, the issue came to a head last week when the CBO released a report estimating that extending the Trump tax cuts would increase the national debt by $4 trillion over the next decade.
Expiring provisions include the significantly larger child tax credit, the death tax exemptions for farmers, and lower taxes for small businesses, among many others.
The White House has said Americans paying over $400,000 will not pay more in taxes, but independent tax analysis have contradicted that claim.
“Without congressional action, most taxpayers will see a notable tax increase relative to current policy in 2026,” the Tax Foundation said in its analysis.
Critics of the the Trump-era tax cuts pointed to the CBO costs and said the cuts disproportionately benefit the wealthy.
The CBO analysis gave some cover for Biden as the national debt nears $35 trillion.
Supporters of the tax cuts argue Americans who are already struggling with elevated inflation and gas prices will pay more.
“President Biden said that if he was reelected, he would allow the Trump tax cuts to expire,” Preston Brashers, an economist at the Heritage Foundation, told The Center Square. “This wouldn’t just break his pledge not to raise taxes on Americans earning less than $400,000, it would obliterate it. If Biden lets the Trump tax cuts expire, Americans earning less than $400,000 will be saddled with a tax hike of more than $2 trillion over 10 years.
“You can quibble about the precise size of the tax hike, but it’s undeniable that an expiration of the Trump tax cuts would hit the middle class,” he added.
House Ways and Means Committee Chairman Jason Smith, R-MO., and House Budget Committee Chairman Jodey Arrington, R-Texas, released a statement defending the tax cuts, which were passed into law in 2017 after Trump took office.
Conservative economists usually argue that when more money is put in the hands of private citizens, it is used to create more wealth and jobs whereas money put into the hands of the government does not lead to the same level of wealth creation and growth, often lost to bureaucracy, waste, and poor spending choices.
The lawmakers said that the economic growth produced by the tax cuts outweighed the extra cost. Over time, more economic growth significantly increases the amount of taxable income for the government as well.
“The truth is, the Trump tax cuts resulted in economic growth that was a full percentage point above CBO’s forecast, and federal revenues far outpaced the agency’s predictions,” the lawmakers said. “In fact, under Trump tax policies in 2022, tax revenues reached a record high of nearly $5 trillion, and revenues averaged $205 billion above CBO predictions for the four years following implementation of the law.”
Economic analysis from the Tax Foundation helps bolster the economic growth argument.
“Tax Foundation estimates permanence for TCJA would create about 904,000 full-time equivalent jobs, ranging from more than 136,000 jobs in California and 75,000 jobs in Texas to about 1,660 new jobs in Vermont,” the group said in its analysis.
The CBO debt stats are a tough blow for Republicans as they fight for extending those tax cuts. They pointed to other key statistics, though, left out of the criticism of the Trump-era tax cuts.
“The officially reported poverty level fell to its lowest rate in 50 years and unemployment rates for minorities and those without a college degree hit all-time lows,” the lawmakers said. “Real median household income rose by $5,000, and wages went up by nearly 5 percent. Americans earning under $100,000 saw an average tax cut of 16 percent. And while the tax burden on low-income families went down, the top one percent saw their share of federal taxes go up.”
If the cuts expire, costs for American taxpayers will increase.
“On the other hand, President Biden’s promise for the expiration of the Trump tax cuts means a family of four making $75,000 today will owe Uncle Sam an extra $1,500 in taxes,” the lawmakers said. “The Child Tax Credit will be slashed in half; small businesses will see their tax rates top 40 percent; and farmers may have to weigh selling the family business to pay a rising death tax.”
The quickest ways to enrich THE PEOPLE and stimulate an economy after cutting spending,,,,,is to cut taxes on the very corporations who pay no taxes but just pass the increased costs of those taxes on to the American consumer in higher product costs. Cutting taxes on corporations making for and allowing bigger corporate profits enables the corporations to expand their businesses, hire more people who come off the unemployment government payrolls who then get to earn more money that pays more taxes that enrich the government of THE PEOPLE, who can then if smart, pay off the national debt. Paying off the national debt for democrats is always a no no, because then their American tax slaves might go free and create a real nation in the image of their great CREATOR, and the great CONSUMER imaged Democrat devils get voted out of office and power. Keeping taxes low, allowing the people who earn the money to keep the money and decide how it is spent. without some government lackey skimming theirs off the top, sounds like a win, win for THE PEOPLE to me.
Two things one must always remember about the Democrat Party is that it LIES and the Democrat Party believes in Tax and Spend.
When the Democrats run out of OUR MONEY they take more of OUR MONEY by raising TAXES.
Note that the Democrat Party has imported 11 Million illegal immigrants and have forced the U.S. taxpayers to provide FREE food, clothing, housing, medical, dental, transportation and cash to their 11 Million illegal immigrants. Each illegal immigrants are provided with $2500.00 plus in freebies.
11 million X $2,500.00 per month, every month is $27,500,000,000,.00 Every month (27,500 Billion dollars every month) 330 BILLION a year just to support the Democrats illegal immigrants.
Taxes, taxes, taxes.. I AM SICK of stinkin taxes.