WASHINGTON – The race to loosen tax laws is in full swing, as economists and advocates across the political spectrum view the expiring Trump-era tax law as an opportunity to advance their economic priorities.
Democratic Rep. Suzan DelBene of Washington said Wednesday that the tax code overhaul will be “a reflection of your values.”
DelBene, who sits on the U.S. House Subcommittee on Tax Policy, said her priorities include modernizing the tax code, raising revenue through carbon fees on imported goods and making lasting an expanded child tax credit, similar to transient changes taking place during the pandemic.
“The most important thing is to start with our values and goals and then look at the policies that will help us get there,” DelBene said at a discussion of proposed tax law changes sponsored by Politico.
The early morning event in Washington’s Union Station brought together tax experts and attorneys from Georgetown University Law Center, the Urban Institute, the Heritage Foundation and the Groundwork Collaborative.
Tax reform
The massive tax reform enacted under the Trump administration permanently reduced the corporate tax rate from 35% to 21%. Law of 2017Pushed by Republicans as the Tax Cuts and Jobs Act, it also introduced several transient measures for corporations and petite businesses. Some of these are expiring or have already expired, including immediate deductions for certain investments.
Temporary changes for households included petite tax rate cuts across the board, a doubling of the child tax credit, and a nearly doubling of the standard deduction — all of which expire on December 31, 2025.
A bipartisan bill to temporarily Extension of expiring corporate incentives And expand the child tax allowance Beyond 2025 passed the US House of Representatives at the end of January, but was blocked by Republicans in the US Senate refuse some of the proposals to extend the child tax allowance.
A bipartisan Congressional Budget Office in May 2024 report It is estimated that extending the tax cuts would cost around $4.6 trillion over 10 years. The bulk of the costs would come from maintaining individual tax cuts, one said analysis of the Bipartisan Policy Center report.
criticism of the 2017 Act refer to a recent one analysis from academics and members of the Joint Committee on Taxation and the Federal Reserve, showing that the benefits of the law go to the highest earners.
DelBene said the review of the corporate tax rate, even on the Republican sideis “on the table” and lawmakers will talk about it “where the TCJA was not about investing and making sure we are fiscally responsible.”
“Incredibly optimistic”
Lindsay Owens, executive director of the Groundwork Collaborative, said Wednesday she is “incredibly optimistic” that elected officials will make “fundamental changes” to the tax code next year.
The progressive think tank sent a letter to House and Senate leaders and top tax experts on Wednesday, urging them to “use the expiration of these provisions as an opportunity to address long-standing problems in our tax code, not just tinker around its edges.”
The letter was signed by 100 organizations across the U.S., from the AFL-CIO and the United Auto Workers to the National Women’s Law Center and the United Church of Christ.
Stephen Moore, who helped draft the Trump-era tax law and is now a senior visiting professor of economics at the conservative Heritage Foundation, said the 2017 law was a “huge success” and that “we’re definitely making these tax cuts permanent.” become”.
Moore serves as an economic adviser to former President Donald Trump’s re-election campaign, but said he is not speaking on behalf of the presidential campaign.
He said he did not agree with Trump on all issues, including the promise to impose 10% tariffs on imported goods, which would go as high as 60% on Chinese imports.
“A tariff is just a consumption tax,” he said. “And so you know, I think it’s not a great policy in my opinion. But if there is a tariff, I would rather have a uniform tariff than try to impose a protectionist tariff to protect this or that industry.”
Citing data showing that funding the Internal Revenue Service increases revenue, Moore said President Joe Biden’s escalate in funding for the agency was “diabolical.”
