A tax break for millionaires and nearly everyone else.
End the COVID-19-era government subsidies that some Americans utilized to buy health insurance.
Food stamps and other safety net programs are subject to limits, particularly those for women and children. Green energy programs from the Biden administration are being rolled back. Massive deportations. Government employment cuts will “drain the swamp.”
After winning the election and surging to power, Republicans are setting an ambitious 100-day program with President-elect Donald Trump in the White House and GOP lawmakers in a congressional majority to achieve their policy objectives.
The plan to restore around $4 trillion in expiring GOP tax cuts, a landmark domestic achievement of Trump’s first term and an issue that may define his return to the White House, ranks first on the list.
“What we’re focused on right now is being ready, Day 1,” said House Majority Leader Steve Scalise, R-La., following a recent meeting with GOP colleagues to sketch out the route ahead.
The policies developing will reignite long-running disputes over America’s goals, its widening income disparities, and the proper size and scope of its government, particularly in light of increasing federal deficits, which are now reaching $2 trillion per year.
The debates will put to the test whether Trump and his Republican supporters can deliver the real-world outcomes that people desired, needed, or supported when they elected the party to control Congress and the White House.
“The past is really prologue here,” said Lindsay Owens, executive director of the Groundwork Collaborative, referring to the 2017 tax discussion.
Trump’s first term was defined by those tax cuts, which were approved by Republicans in Congress and signed into law only after their initial campaign promise to “repeal and replace” Democratic President Barack Obama’s health-care law fizzled, failing with the famous thumbs-down vote by then-Sen. John McCain, R-Ariz.
The Republican majority in Congress soon shifted to tax cuts, preparing and passing the multitrillion-dollar bill by the end of the year.
Since Trump signed the cutbacks into law, higher-income households have reaped the most benefits. According to the Tax Policy Center and other groups, the top one percent – those earning almost $1 million or more — received an income tax savings of around $60,000, while people with lower incomes gained as little as a few hundred dollars. Some folks ended up paying around the same.
“The big economic story in the U.S. is soaring income inequality,” Owens told reporters. “And that is actually, interestingly, a tax story.”
Republicans in Congress have been meeting secretly for months, as well as with the president-elect, to discuss options to prolong and improve tax breaks, some of which would otherwise expire in 2025.
That includes maintaining several tax brackets and a standardized deduction for individual earners, as well as the current rates for so-called pass-through companies such as law firms, doctors’ offices, and enterprises that report their revenues as individual income.
Typically, tax cuts would be prohibitively expensive. The Congressional Budget Office predicts that keeping the expiring provisions in place will add $4 trillion to deficits over ten years.
In addition, Trump wants to include his own goals in the tax plan, such as cutting the corporation rate from 21% in 2017 to 15%, as well as eliminating individual taxes on tips and overtime pay.
But Avik Roy, head of the Foundation for Research on Equal Opportunity, said blaming tax cuts for the nation’s economic inequality is “just nonsense” because tax payers at all income levels benefited. He instead cites other variables, such as the Federal Reserve’s historically low interest rates, which allow for low-cost borrowing, especially by the wealthy.
“Americans don’t care if Elon Musk is rich,” Roy told me. “What they care about is, what are you doing to make their lives better?”
Typically, policymakers try to offset the expense of a policy change with budget money or cuts elsewhere. However, there are almost no agreed-upon income increases or spending cutbacks in the yearly $6 trillion budget to finance such a massive cost.
Instead, some Republicans contend that the tax cuts will pay for themselves through the trickle-down effect of projected economic growth. Trump’s tariffs, which were proposed last week, could provide another source of offset revenue.
Some Republicans argue that there is precedent for merely continuing tax cuts without compensating the expenses because they are not fresh changes, but rather existing federal policy.
“If you’re just extending current law, we’re not raising or lowering taxes,” said Sen. Mike Crapo, R-Idaho, the new head of the Senate Finance Committee, on Fox News.