WASHINGTON (news agencies) — A tax break for millionaires, and almost everyone else.
An end to the COVID-19-era government subsidies that some Americans have used to purchase health insurance.
Limits to food stamps, including for women and children, and other safety net programs. Rollbacks to Biden-era green energy programs. Mass deportations. Government job cuts to “drain the swamp.”
Having won the election and sweeping to power, Republicans are planning an ambitious 100-day agenda with President-elect Donald Trump in the White House and GOP lawmakers in a congressional majority to accomplish their policy goals.
Atop the list is the plan to renew some $4 trillion in expiring GOP tax cuts, a signature domestic achievement of Trump’s first term and an issue that may define his return to the White House.
“What we’re focused on right now is being ready, Day 1,” said House Majority Leader Steve Scalise, R-La., after meeting recently with GOP colleagues to map out the road ahead.
The policies emerging will revive long-running debates about America’s priorities, its gaping income inequities and the proper size and scope of its government, especially in the face of mounting federal deficits now approaching $2 trillion a year.
The discussions will test whether Trump and his Republican allies can achieve the kinds of real-world outcomes wanted, needed or supported when voters gave the party control of Congress and the White House.
“The past is really prologue here,” said Lindsay Owens, executive director of the Groundwork Collaborative, recalling the 2017 tax debate.
Trump’s first term became 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 sputtered, failing with the famous thumbs-down vote by then-Sen. John McCain, R-Ariz.
The GOP majority in Congress quickly pivoted to tax cuts, assembling and approving the multitrillion-dollar package by year’s end.
In the time since Trump signed those cuts into law, the big benefits have accrued to higher-income households. The top 1 percent — those making nearly $1 million and above — received about a $60,000 income tax cut, while those with lower incomes got as little as a few hundred dollars, according to the Tax Policy Center and other groups. Some people ended up paying about the same.
“The big economic story in the U.S. is soaring income inequality,” said Owens. “And that is actually, interestingly, a tax story.”
In preparation for Trump’s return, Republicans in Congress have been meeting privately for months and with the president-elect to go over proposals to extend and enhance those tax breaks, some of which would otherwise expire in 2025.
That means keeping in place various tax brackets and a standardized deduction for individual earners, along with the existing rates for so-called pass-through entities such as law firms, doctors’ offices or businesses that take their earnings as individual income.
Typically, the price tag for the tax cuts would be prohibitive. The Congressional Budget Office estimates that keeping the expiring provisions in place would add some $4 trillion to deficits over a decade.
Adding to that, Trump wants to include his own priorities in the tax package, including lowering the corporate rate, now at 21% from the 2017 law, to 15%, and doing away with individual taxes on tips and overtime pay.
But Avik Roy, president of the Foundation for Research on Equal Opportunity, said blaming the tax cuts for the nation’s income inequality is “just nonsense” because tax filers up and down the income ladder benefited. He instead points to other factors, including the Federal Reserve’s historically low interest rates that enable borrowing, including for the wealthy, on the cheap.
“Americans don’t care if Elon Musk is rich,” Roy said. “What they care about is, what are you doing to make their lives better?”
Typically, lawmakers want the cost of a policy change to be offset by budget revenue or reductions elsewhere. But in this case, there’s almost no agreed-upon revenue raisers or spending cuts in the annual $6 trillion budget that could cover such a whopping price tag.
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