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Democrats Target Trump Tax Cuts

Posted on Tuesday, May 9, 2023
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by Andrew Abbott
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AMAC Exclusive – By Andrew Abbott

While Congress and the national media remain fixated on the ongoing debt ceiling negotiations, financial analysts are warning that another financial “hurricane” could be heading directly for the U.S. economy: the expiration of the tax relief in former President Donald Trump’s 2017 Tax Cuts and Jobs Act (TCJA). Even if President Joe Biden manages to avoid a default disaster in the coming weeks, the expiration of the TCJA could be catastrophic for the economy – and Joe Biden’s nascent 2024 re-election bid.

The Trump-led TCJA was the most significant overhaul of the U.S. tax code in decades. Among its many changes, the bill lowered five of the seven income tax rates to their lowest level in decades. The overwhelming majority of this relief was focused on middle and lower-income earners.

However, the majority of provisions contained within it are set to automatically expire in 2025. The expiration of these provisions would result in higher taxes on millions of Americans.

Biden excoriated the TCJA throughout his 2020 campaign, calling it “welfare for the rich” – even as virtually every American was coming off years of paying less in taxes. He repeatedly pledged that when he took office, “on day one, I will move to eliminate Trump’s Tax Cuts.”

Once elected, however, Biden reversed himself, calling for an extension of most of Trump’s tax policy. As Michael Lucci noted in an article with City Journal, “Deference to the TCJA reveals that it is, in fact, good policy with bipartisan appeal.” With two years of unified government, Democrats failed to repeal the TCJA.

But Biden’s desire to keep the Trump tax cuts in place has run up against the reality of his inflationary big spending policies. Although Biden has proposed massively increasing taxes on businesses and the wealthy to offset spending, economists warn that such a strategy will not only fail to raise the money to pay for Democrat programs, it will likely collapse the U.S. economy in the process.

If President Biden lets the Trump tax cuts expire or repeals them, it would have a calamitous effect on millions of families. According to Americans for Tax Reform, taxes would rise by as much as $2,000 for families earning less than $73,000 a year. Single parents making less than $50,000 yearly would see their taxes rise by over $1,000. Most alarming, “millions of households would see their standard deduction cut in half, adding to their tax complexity as they are forced to itemize their deductions and deal with the shoebox full of receipts on top of the refrigerator.”

These harsh realities put Democrats in a difficult position when debating the debt ceiling. In an interview with MarketWatch, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, noted, “Budgets that ignore [TCJA] expirations are likely to paint an overly rosy outlook, as extensions without offsets would dramatically worsen the fiscal outlook. As a result, any solution or compromise in the current budget battle that does not take into account the future of the Trump tax cuts is doomed to fail.”

Biden’s proposed budget seemingly attempts to have his fiscal cake and eat it too. He suggests preserving the Trump tax cuts for middle and working-class Americans while reversing and increasing those aimed at wealthier individuals. Yet, many small businesses and retiring families will also suffer heavily under these higher tax rates.

Biden’s budget would also raise the top marginal rate on long-term capital gains. CNBC notes, “The impact would be significant for many small business owners who want to sell businesses, especially the scores of Baby Boomers who are aging out.” In short, any retiring individual who doesn’t have the lion’s share of their money in savings accounts would suffer heavily. Older families selling their homes and retirees selling their businesses would all be hit hard.

Biden has also called for reversing the TCJA’s reduction of the corporate tax rate from 35 percent (which was by far the highest in the developed world) to 21 percent. Biden’s plan would hike it back up to 28 percent, likely discouraging business investment and slowing economic growth.

Debate over the repeal or restructuring of the Trump tax cuts would likely heat up sometime in the summer of 2024 – right as the presidential race enters its most critical months. If Biden alienates seniors, a critical demographic in any election, it could be disastrous for his campaign. Moreover, uncertainty about the future of the TCJA in the business community could encourage market instability and ripple effects throughout the entire economy, creating fears of an economic downturn right when Biden needs it least.

At the same time, if Biden fails to rescind Trump’s tax cuts, it would severely hamper the government’s ability to raise more revenue – meaning that the Treasury will have to print even more money to fund the government. This would send inflation, still nearly three times the Fed’s target rate, skyrocketing once again.

There don’t seem to be many good options for Biden at the moment. But in light of his reckless actions over the past two years, that is a problem entirely of his own making.

Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.

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Stephen Russell
Stephen Russell
1 year ago

For Power , Control,Waste, Fraud

legally present
legally present
1 year ago

While we have less spending power let’s stick it to the working man and woman. Gotta pay slackers college debt, gotta pay for the illegal aliens lawyers and other needs. Really stick it to the white man, they all think we OWE them for their life choices.

Myrna Wade
Myrna Wade
1 year ago

We need someone in charge who understands the relationship between taxes and spending.

Melinda
Melinda
1 year ago

There is so much waste in the federal budget, but politicians have to hand out goodies to their voters. What would happen if they stopped pandering for votes and campaigned honestly? I know, it ain’t gonna happen!

Tom
Tom
1 year ago

The government shuts down each weekend, and many holidays. I got it the military etc are at work. However all employees get their pay after a shutdown in full. Are the days of a shutdown applied towards vacation pay. Nope. So employees get a paid vacation of extra days.

Shut it down

joe mchugh
joe mchugh
1 year ago

“Please , please raise my taxes.”, said no wage earner, ever! On the other hand the usual low income, or no income tax payer likes the idea of higher taxes because such people won’t pay the higher tax rates anyway.

It’s the same thing that the Founding Fathers feared, i.e. the people will vote for government freebies, especially those citizens who don’t pay taxes in thje first place.

The real problem? Those who like the promises of socialism verses those who pay the taxes.
Last time checked, 47% of all wage earners pay no Federal income taxes. Guess who those people vote for. The Democrats could safely nominate anyone to be their candidate for the White House, even a brain addled dummy and the odds would still favor the Democrats. …………………. wait a minute!!

Kdesq
Kdesq
1 year ago

Why is it that the budget can’t be cut? We could cut literally a trillion and a half to 2 trillion dollars out of the budget. That is literally nothing but fraud, waste and abuse. We could keep the tax rates just like they are and by cutting that we’d actually start cutting into the national debt. The fact a writer for amac would basically say it’s an either or situation is very disheartening.

PaulE
PaulE
1 year ago

I’m sure Team Biden will say and do anything between now and election day 2024 to get the puppet a second term. The MSM will line up behind the puppet 100%. After that, Team Biden will simply allow the Trump tax cuts to expire and taxes will rise across the board, along with inflation and our exploding national debt. Our economy will slow further as we resemble a stagnant Europe more and more and the message from the Biden administration and the MSM will be that the American people have to learn to “do with less” for the sake of “saving the planet”. Most Millennials and all Gen X and Gen Z’ers will accept that line and fall in-line with whatever follows.

President Xi continues to laugh at how the American people have allowed their country to be so easily run into the ground on multiple fronts. Team Biden has been the most effective weapon at dismantling the United States, that the Chinese could have ever deployed. As for Biden, by early 2025 he will be even less mentally competent than he already is today. So it is unlikely he will be able to realize much of what is going on around him aside from getting his daily chocolate chip ice cream treat. So the author’s concerns about what Biden may think are unfounded. Dementia patients are less and less connected to the reality around them as time goes on. I’m sure Biden will be blissfully unaware of his surroundings by the time his second term gets underway.

jocko
jocko
1 year ago

DEPORT ALL liberals, illegals AND THE ONCE HONORABLE, fbi, STAT, TO MAGA

jocko
jocko
1 year ago

liberals = CANCER AND ARE THE ENEMY OF OUR NATION

PFArizona
PFArizona
1 year ago

What a mess the Biden Administration has made of our Country. So for those of you who were offended by Trump tweets. Are you over it yet!

Tom
Tom
1 year ago

It’s already starting. Next it will be grandmothers rolling over the cliff.

johnh
johnh
1 year ago

Why does POTUS have the power to change tax codes? This should be up to the Legislative branch & not in Executive branch in my opinion. And I assume this tax cut ends in 2025 because Trump thought he would serve another term thru 2024. Did Trump do this with Executive Order or how did this tax cut go into effect ???????

johnh
johnh
1 year ago

Read in news media today, that Trump is going to do a Town Hall on CNN tomorrow. How can that be when Trump called (CNN) FAKE NEWS , FAKE NEWS, etc. when he was POTUS. Does this mean that he will not believe his answers tomorrow???? You must admit that Trump was very rude to news media that asked him tough questions at briefings.

Rik
Rik
1 year ago

What, you’re surprised? . . . Comrade Jack*ss Joe LIES everytime he opens his mouth! I can’t bear to watch or listen to him! Anybody who believes anything he says HAS TO BE STUPID!

edward
edward
1 year ago

What would you expect from communists. They always talk about taxing “billionaires and millionaires” (obama’s words many times over), yet they come after the middle class EVERY TIME! Problem is, “USEFUL IDIOTS” buy their lies!

H.L.Howell
H.L.Howell
1 year ago

We need a limit to how much each candidate can spend on campaigns because the way it is now,they are buying the positions they want. That would stop soros and all dirty money from buying our government.

J Rea
J Rea
1 year ago

The Trump Tax cuts will not be a 24 issue because the House and Senate will not take it up until after the election. As long as the Democrat Party controls the Senate there is no chance to extend the Trump cuts. Only when the cuts expire after 25 ( a tax increase without enacting a tax increase ) will congress consider reenacting some of the cuts. Unless the Republicans take the Senate and the Presidency and keep the House the Trump cuts will not be extended. That automatic tax increase will devestate the economy but the Democrats will let it happen. Who is to blame? The voters in Arizona Georgia and Pennsylvania who put Biden in the White House and Schumer in control of the Senate. Elections have consequences. Severe consequences

Steve
Steve
1 year ago

Welfare for the rich is just another lie. The cap on SALT deductions causes HIGHER effective tax rates for many high wage earners in high state and/or local tax jurisdictions, where the majority of high wage earners work and live. But the dishonest democrats will never admit this fact. Instead, they use tactic of misrepresentation by focusing exclusively on reduction in marginal tax rates, while never discussion a bigger reduction in expense deductions for so many high income households. It’s as if they don’t understand basics of income statements as including both revenue and expense, and net or adjusted income matters more than gross income. Not shocked — neither smart not honest.

Casey C Matt
Casey C Matt
1 year ago

Ohhh……….PLEASE let the Dems run on promoting tax hikes………in a recession featuring an accompanying collapse of the dollar and the coming end of that dollar as the reserve currency.
Yep, Americans will leave their tar paper tents and march in droves to the polling station……..or rigged drop box and eagerly vote for even more pain.
Yep………c’mon Brandon…….end the Trump tax cuts……….BOY

David Millikan
David Millikan
1 year ago

President Trump put money in our pockets, bank accounts, IRA’s, and 401k’s with no Inflation which created more jobs and stronger economy besides being ENERGY INDEPENDENT.
Dictator Beijing biden has done NOTHING except RAISE TAXES and STOLE ALL of our money with his INFLATION INCREASE ACT and wants MORE TAXES leaving US
WITHOUT ANY MONEY for ourselves.
That makes everyone a SLAVE to the government.
All YOU do is go to work and PAY ALL YOUR INCOME FOR TAXES TO SUPPORT
Dictator Beijing biden’s ILLEGAL ALEIN TERRORIST INVASION AND sending the rest to Ukraine and Communist China leaving AMERICANS WITHOUT.
The solution is CUT TAXES. NOT RAISE THEM.

Max
Max
1 year ago

Bottom Line: Biden and company will let the tax relief to expire or repeal it. This will be another nail into this nation’s coffin lid so the One World Order agenda can be accomplished. The voters that continue to fall into the web of the deceivers will continue to scratch their behinds and continue to snooze while the world falls apart.

Joseph Meyer
Joseph Meyer
1 year ago

Biden continues the lie–asking with “fine people on both sides” and police fatalities on 1/6–that the Trump tax rate cuts increased the deficit. In point of fact, tax revenues increased at a faster rate AFTER those rate cuts were implemented, just as the Reagan rate cuts doubled revenues, due to increased economic activity.Tax rate reductions are not revenue reductions, and describing them in terms of dollar amounts is a canard. Indeed, they almost invariably increase revenues, until the tax rate reaches sixteen percent.

Randall L. Beatty
Randall L. Beatty
1 year ago

I wish instead of going after Trump, Biden and the Dems should take care of this country the border is a mess and they do nothing we have major money problems here the same nothing being done about it this country is about to go into a recession and all they do is hate on Trump that is beyond stupid.

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