President Joe Biden came into office promising to repeal President Donald Trump’s 2017 Tax Cuts and Jobs Act—a law that turbocharged U.S. job growth and national competitiveness. In the first two years of the Biden administration, there was a chance that the president could have succeeded in undermining the law.
Yet, today, as President Biden finishes his term, the Trump tax cuts are not only still standing but may be strengthened.
That is, if Senate Republicans seize the opportunity before them.
In January, the House overwhelmingly passed the Tax Relief for American Families and Workers Act (H.R. 7024), a major new tax relief package that builds on the successes of the 2017 Tax Cuts and Jobs Act. Its relief targets the engines of U.S. productivity, including full deductibility for research and development costs, full and immediate expensing, interest deductibility, and restoration of deductibility of depreciation and amortization costs.
Passing this bill enhances U.S. competitiveness with China, boosts job creation, increases wages for workers, and promotes new investment and innovation.
But it also does something else: The bill extends important cost-recovery provisions of the 2017 Republican tax cuts signed by President Trump, an essential step in achieving full permanency of the Tax Cuts and Jobs Act.
Without congressional action, President Trump’s 2017 tax cuts expire at the end of 2025.
Although Senate Finance Committee Ranking Member Mike Crapo and some colleagues have raised objections about provisions of the bill that would expand the Child Tax Credit, Mr. Crapo and other GOP senators need to keep sight of the significance of this measure in a larger fight.
Passing the Tax Relief for American Families and Workers Act would vastly improve Republicans’ bargaining position going into the fight over the future of the Trump tax cuts.
And right now, advocates for job growth and competitiveness must be prepared for this fight.
At a March 12 hearing on the Tax Relief for American Families and Workers Act, Senate Finance Committee Chair Ron Wyden (D-Ore.) declared, “This set of policies isn’t going to be on the table in 2025 if this bill stalls out.” It’s understandable for Republicans to dismiss this as empty talk, given that the GOP faces a highly favorable Senate map in this year’s elections.
But, in politics, nothing is certain. Remember the “red wave” that wasn’t? Even if Republicans retake the Senate, Mr. Wyden and allies could follow through on their threat if Democrats retain the White House or take back the House.
If GOP senators want to save their signature economic success of the past decade, they must get to “yes” on this tax reform.
