House Republicans' plan to cut taxes for the rich is next on their agenda

House Republicans are gearing up to pass yet another round of tax cuts for the rich, making that their top priority after wrapping up the debt ceiling debate, the Wall Street Journal reported on Tuesday.

Republicans want to pass the new round of tax cuts even though it would almost certainly increase the national deficit, which they just spent months warning is too high and is crippling the country.

In fact, Republicans had refused to raise the debt ceiling, which was likely to be breached in early June, unless the White House agreed to cuts in funding for programs that largely benefit low-income and middle-class Americans. Their demands included establishing work requirements for recipients of benefits under social safety net programs such as the Supplemental Nutrition Assistance Program and Medicaid, as well as canceling President Joe Biden’s student debt forgiveness program. Not raising the debt ceiling would have caused the United States to default on its obligations, a scenario that experts said would have plunged the country into a recession with devastating job losses. Congress ultimately raised the debt ceiling in a bill that included some cuts to IRS funding and work requirements for some SNAP and Medicaid recipients.

Some House Republicans, meanwhile, have been trying to extend the 2017 Tax Cuts and Jobs Act, passed under former President Donald Trump, which overwhelmingly benefited corporations and the rich. In February 2023, Florida Republican Rep. Vern Buchanan, along with 72 Republican co-sponsors, reintroduced the TCJA Permanency Act, which he first introduced in 2022 and which would make the 2017 tax cuts permanent.

A report published in May by the nonpartisan Congressional Budget Office found that extending the Trump tax cuts would add $2.5 trillion to the deficit over the next decade.

In order to offset the cost of the tax cuts, Republicans want to repeal clean energy tax credits Democrats passed in the Inflation Reduction Act. According to the White House, those clean energy credits cover 30% of the installation cost for solar panels, 10% of the cost of insulating houses to make them more energy-efficient, a $300 tax credit to install a heat pump, and up to $7,500 to purchase a new electric vehicle.

“MAGA Republicans don’t give a damn about the deficit, and today’s estimate of the cost of kickbacks for their friends and donors is further proof,” Sen. Sheldon Whitehouse (D-RI) said in a statement in May. “Republicans racked up the national debt by giving tax breaks to their billionaire buddies, and now they want everyone else to pay for them.”

Democrats have argued that rather than trying to cut taxes for the rich, Republicans should focus on reinstating the expanded child tax credits that expired at the end of 2022. 

“We need a commensurate effort with respect to programs that are on the domestic side and give all Americans a chance to get ahead,” Senate Finance Committee Chairman Ron Wyden (D-OR) told the Wall Street Journal. “It can’t be disproportionate.”

Published with permission of The American Independent Foundation.