Although it was one of President Trump’s key legislative victories, the Tax Cuts and Jobs Act (TCJA) and its significance as a keystone of Trump’s economic agenda seem to be forgotten by some Republicans of late. The bipartisan Tax Relief for American Families and Workers Act currently up for consideration in Congress cements and expands upon the legacy of the TCJA - but it is facing Republican opposition despite the legislation taking its cues from President Trump’s successes.
The Tax Cuts and Jobs Act, the first major tax reform in several decades, is often credited with supercharging domestic investment and the overall U.S. economy under Trump. Unemployment hit historic lows while the stock market, 401(k) balances, and small businesses’ approval all hit record highs. Fast forward to today, and head to head, voters still trust Trump more than Biden on economic issues. Voters are saying economic worries are their top issue, businesses are cutting jobs in swathes, and President Biden is increasingly vulnerable on his pro-special interest, heavy regulation Bidenomics agenda.
In short, Bidenomics has been terrible for the everyday American, and Trump’s Tax Cuts and Jobs Act legacy represents the exact opposite economic philosophy. Several of its key planks are now included within the tax deal under consideration, and a small band of conservatives are threatening to torpedo these hallmarks of Trump’s economic legacy. These broad-based pro-growth and pro-family provisions represent an antidote to the hundreds of billions in special-interest tax breaks that characterized the alternative energy giveaways in Biden’s signature Inflation Reduction Act.
Instead, the planks built into Ways and Means Chairman Jason Smith’s (R-MO) Tax Relief for American Families and Workers Act will keep some of the most critical Trump tax cuts for businesses to boost investment and productivity (some estimates say permanency would mean an increase of .06 percent in GDP growth) - all while maintaining a delicate bipartisan balance of priorities in a deeply divided government. For members of Congress less interested in maintaining TCJA’s legacy of economy-wide growth, there are boosts in tax credits for families that don’t reflect excessive COVID-era changes, and this legislation does not alter the credit’s citizenship status eligibility requirements from TCJA.
Republicans at the time of TCJA’s passage were united in supporting this economic agenda. Nearly every Republican Senator at the time supported this bill, and the only holdout, Senator Bob Corker (R-TN) is no longer in the Senate. Almost the entire House Republican conference also supported it, with only two voting “No” remaining in the House.
Rejecting this potential signature win so close to the finish line diminishes the Trump tax cuts’ potential reauthorization prospects in 2025 and will harm families, businesses, the economy, and elected officials’ cases at the ballot box in November.
A classic election year adage from President Clinton’s trouncing of incumbent George H. W. Bush comes to mind when observing 2024 election dynamics: “It’s the economy, stupid.”
Members of Congress should keep in mind that Trump’s approval ratings among voters in battleground districts are higher than Biden’s, and Republicans are trusted more by voters on inflation issues (45 percent to 36 percent). Furthermore, 66.2 percent of voters say that the economy is in either stagnation, recession, or depression. Losing sight of bringing economic wins home with this backdrop would be a mistake for either party.
For a Congress that has notched significantly fewer wins than under President Biden’s first two years in office, this legislation offers a tremendous opportunity to chart a significant victory, maintain key planks of Trump’s successful tax-cutting economic agenda, and set the stage for a better playing field in November.
If Congress rejects these tax provisions now, it could make future tax negotiations far more challenging for Republicans, particularly if Biden is re-elected. A Democratic House, for instance, would be more likely to forgo extending the expiring pro-growth aspects without prior recorded support for these provisions. On the same token, if this package fails now and Trump returns to the White House, will some recalcitrant conservatives be emboldened to oppose the entirety of TCJA? Both scenarios should concern pro-growth members from both parties.
If Republicans would like to score big policy wins in the next Congress, they would do well to demonstrate to voters that they can achieve some wins today. This bipartisan legislation would demonstrate that they are capable of doing what’s best for taxpayers and can be trusted to lead.
Nicholas Johns is the Senior Policy and Government Affairs Manager for the National Taxpayers Union, a nonprofit dedicated to advocating for taxpayer interests at all levels of government.
Join the conversation as a VIP Member