Amidst Claims of Support, GOP Accused of Neglecting Working-Class Families
Following the recent unveiling of tax-oriented legislative drafts by the Republican leaders in the U.S. House of Representatives late on Friday, and the scheduling of a markup session for President Donald Trump’s touted “One, Big, Beautiful Bill,” voices from the economic justice community have raised concerns.
Jason Smith, the Chair of the House Ways and Means Committee and a Republican from Missouri, announced a hearing set for Tuesday afternoon. He presented 28 pages of legislative text aimed at the reconciliation package and lauded the Tax Cuts and Jobs Act (TCJA) that was passed by Congress and signed by Trump in 2017. This legislative effort comes just as parts of the TCJA, often criticized as the “GOP tax scam,” are nearing expiration.
“The proposal seems to reaffirm a reliance on trickle-down economics, offering substantial tax reductions that predominantly benefit the wealthy, while offering little to everyone else,” stated Amy Hanauer, the executive director of the Institute on Taxation and Economic Policy (ITEP), in a statement on Saturday. “Additionally, many of the slight enhancements aimed at lower- and middle-income families are suggested to be temporary, in stark contrast to the permanent benefits suggested for the wealthiest.”
ITEP specifically pointed out that “the 2017 adjustments to personal income tax rates and brackets would become permanent,” as well as the deductions individuals gain from “pass-through” businesses, which are also proposed to increase from 20% to 22%. Republicans are also looking to raise the estate tax exemption from $13.99 million per spouse to $15 million, with adjustments for inflation to continue.
The advocacy group emphasized, “A very generous tax break for offshore earnings (the GILTI deduction) would be made permanent, effectively halving the tax rate on foreign profits of American companies compared to their domestic earnings.”
Moreover, ITEP flagged that “the 2017 modification to the standard deduction would be made permanent, with a temporary four-year increase raising it to $16,000 for individuals, $24,000 for head of households, and $32,000 for married couples.”
“The child tax credit would see a temporary rise to $2,500 per child from $2,000 for a span of four years, yet 4.5 million American children would be excluded from the CTC due to a new requirement for both parents to have Social Security numbers,” the organization cautioned.
Chuck Marr, Vice President of Federal Tax Policy at the Center on Budget and Policy Priorities, also criticized the bill in a series of posts on Friday, pointing out the bill’s heavy bias towards the affluent with “several regressive expansions of the 2017 tax cuts filled with costly timing tricks, while, despite their claims, failing to support millions of working-class families.”
Marr condemned the House Republicans for their “obvious neglect” concerning the CTC, as well as their continued promotion of the pass-through deduction and estate tax exemption, which he labeled “the most skewed provision of the 2017 law.”
“This Tuesday, House Republicans in one committee will be stripping away people’s health insurance, in another removing food assistance, and in yet another, they’ll be permanently increasing the amount the wealthiest heirs can inherit without facing taxes,” he remarked, emphasizing that the GOP plans to fund these tax benefits for the rich by cutting Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
Marr noted, “It appears that House Republicans are repeating their overt strategy from 2017: Making the provisions that benefit the wealthy permanent (recall the massive corporate rate cut from 2017) while keeping broader provisions temporary—clearly backwards priorities.”
“So tonight, it’s clear—despite all the noise from Trump—House Republicans are advocating for further tax cuts for the wealthy, thereby increasing its already excessive costs, while severely failing to deliver for the many families he claimed to support,” he concluded.
Despite Trump’s recent suggestions for a modest tax increase on wealthy Americans, as reported by NBC News, the legislative drafts led by Smith notably omit any increase in the top tax rate from 37% to 39.6% for high-income earners. Trump argued on his Truth Social platform that even a “TINY” tax hike for the rich would be politically exploited by Democrats, suggesting that Republicans should avoid it, although he personally would accept such a measure.
While Trump’s remarks this week have sparked discussions about him proposing “to raise income taxes on wealthy Americans,” ITEP’s Steve Wamhoff and Carl Davis have argued in a blog post that “no one should be misled: The wealthiest taxpayers received enormous tax cuts from Trump’s 2017 law and are set to receive even more significant tax breaks under the current proposals by Trump and the Republicans.”
“We need laws that require the wealthy to pay more, not less tax,” they added. “The Republican legislation, however, will do the opposite, regardless of whether or not this latest suggestion from Donald Trump is included.”
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An economic reporter, Dax Everly breaks down financial trends and their impact on Americans’ daily lives.