When Republicans approved tax breaks for the wealthy and big corporations seven years ago, GOP policymakers knew that much of their tax overhaul would expire in 2025. Naturally, these same partisans are eager to keep the lower rates in place and make them permanent.
The non-partisan Congressional Budget Office recently presented lawmakers with a new price tag: They could extend the Trump-era tax breaks, but if they do, it’ll add $4.6 trillion to the national debt over the next decade.
“This latest CBO report is a harsh reality check for the self-proclaimed fiscal hawks on the right who complain about the deficit,” Senate Majority Leader Chuck Schumer said last week. “They complain about spending $50 million to help feed kids, but they seem to have no concern about a tax cut that mainly goes to the wealthy and big corporations that increases the deficit by $4.6 trillion. It’s another reminder of why at the end of the day, the Trump tax cuts were a dud for the economy and political loser for the Republican Party.”
In theory, this should be about the point at which GOP officials considered either rolling back their tax-cutting ambitions or looking for some way to pay for their tax giveaways. In practice, as a Washington Post report explained this week, Republicans are eager to do the opposite.
Republicans in Congress are preparing to not just extend former president Donald Trump’s 2017 tax cuts if they win control of Washington in November’s elections, but also lower rates even more for corporations, laying the early groundwork for a ferocious debate over taxes and spending next year and beyond.
To be sure, Trump has been unreserved about his intentions in this area. It was late last year, for example, when he told attendees at a Mar-a-Lago event, “You’re rich as hell. … We’re gonna give you tax cuts.” Soon after, he told Fox News he was interested in another round of tax breaks for corporations.
But as the Post’s report emphasized, it’s not just the former president: Congressional Republicans are at least as enthusiastic about more corporate tax breaks, worth roughly $1 trillion. In fact, if the GOP takes control of the White House and Capitol Hill, Republican leaders plan to approve the tax giveaways early in 2025.
For Democrats, this is both a threat and an opportunity. On the one hand, the prospect of another round of tax cuts for those who don’t need them seems ridiculous, but on the other hand, this could be a potential election-season issue. Here are some key elements to keep in mind:
1. The GOP’s tax cuts from 2017 didn’t work.
2. Polls show broad public support for raising, not lowering, taxes on the wealthy and big corporations.
3. These tax breaks would likely make inflation worse.
4. Republicans are responding to the circumstances by trying to undermine confidence in the Congressional Budget Office.
5. To the extent that anyone took the GOP seriously when it pretend to care about the deficit, voters really ought to know better by now.
6. There’s occasional talk among GOP partisans that the Republican Party has now shifted its focus from the wealthy to working-class families. Such chatter has long been absurd, but as Republican officials prepare to pass more tax giveaways for the rich and Big Business, it’s definitely worse now.
President Joe Biden might not be winning any popularity contests right now, but when it comes to tax policy, there can be no doubt that the Democratic incumbent and his party have a compelling story to tell voters.
This post updates our related earlier coverage.
