
Cold Feet Over Extending the Trump Tax Cuts?
Author: Greg Valliere
June 25, 2024
EXTENDING THE 2017 TRUMP TAX CUTS has been considered likely on Capitol Hill, but the mood is shifting — as Congress confronts the huge price tag that will be required. A complete extension next year could cost $5 trillion over the next decade.
THE RELIABLE ROLL CALL web site is reporting that Republicans who are putting together an extender are looking at a smaller package, because of the cost of the interest rate hit and changes in the GDP since 2017, when the economy arguably needed more stimulus than it does now.
LOWER TAX RATES on individuals, relief from the alternative minimum tax, treatment of money U.S. companies make abroad, small-business deductions and other provisions established by 2017 law are set to expire at the end of next year.
BIDEN ADMINISTRATION officials, including Treasury Secretary Janet L. Yellen and Director of the National Economic Council Lael Brainard, have said Democrats would extend tax breaks for households making less than $400,000 and offset the cost with tax increases on the wealthy and corporations. But the Democrats would need to control both houses after this fall’s elections in order to get massive tax hikes through Congress.
BECAUSE OF THE PRICE TAG, members of the tax-writing House Ways and Means Committee say fully extending the provisions isn’t a foregone conclusion. “Everything’s on the table,” one Republican told Roll Call.
OFFSETS INCLUDED IN THE BILL, such as the $10,000 cap on state and local tax deductions, are unpopular among members representing districts in high-tax states, including New York Republicans, who helped hand the GOP majority in the House in 2022.
OTHER PROVISIONS intended to lower the cost of the 2017 law, such as the amortization of businesses’ deductions of research and development investments, are also unpopular among Republicans and Democrats, and have been the target of repeal.
FULLY EXTENDING the expiring provisions for another decade would cost $4 trillion, not counting debt service costs, according to the Joint Committee on Taxation. The total including interest payments on the added debt would send the cost past $5 trillion, according to the Committee for a Responsible Federal Budget.
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