While Republicans control the House and Senate, the margin for error is razor thin – and when you combine massive tax legislation with several other key fiscal inflection points, it’s not hard to see the ways Washington can snatch defeat from the jaws of victory.
Major portions of the 2017 Tax Cuts and Jobs Act expire in 2025, triggering a massive tax increase on families and small businesses. If allowed to happen, the average American household can expect a $1500 tax bill increase.
My organization, Americans for Prosperity, is spearheading a multi-million dollar campaign called “Protect Prosperity” to not only make Americans aware of the coming tax hikes – more than 60% are unaware of what is headed our way – but to drive action in Congress.
Voters made it clear the economy was top of their priority list, and if you think the last four years of recovering from the COVID collapse and Biden-driven inflation were bad, just wait. If Congress doesn’t take steps to extend or, ideally, permanently codify the tax cuts, the last four years are just the start.
If the TCJA tax cuts expire, Americans are going to watch their take home pay decrease while prices of needed goods increase. On average, family tax bills will increase by $3,505 in Florida, $2,265 in North Carolina, and a wild $4,254 in Wyoming. And that’s not to mention the job loss numbers that will follow tax increases.
Don’t look at those numbers as just as averages and dollars. Look at them as having to take second jobs just to get by, stretching the already-thin grocery budget, putting off vacation plans, or worrying about how the mortgage will get paid (if you can even afford a home).
These were the pains and worries that drove Americans to send a resounding message to Congress in November.
Inflation caused by reckless government spending penalized an honest day’s work with reduced spending power. Prices went up nearly 20% and cost American families over $12,000 more each year to maintain the quality of life they had in January 2021.
Regulations and administrative red tape suffocated entrepreneurs and innovators. And the economy seemed increasingly rigged in favor of special interests and crony industries favored by the tyranny of “experts” in the burgeoning administrative state.
Americans overwhelmingly rejected the status quo of control-focused economic policy and opted for a different way. The new Republican-led Congress and administration had made clear they were listening, but getting a product across the finish line won’t be easy.
Voters know tax cuts work. Recent polls indicate that over three-quarters of Americans, including 74% of independents and nearly two out of three Democrats, agree that this is a bad time to raise taxes.
The statistics bear this out, showing putting tax dollars back into the hands of the people instead of the government means more prosperity. The House Ways and Means Committee found that the 2017 tax cuts increased real median household income by $5,000 and lifted real wages by nearly 5% in the first two years following the enactment of the TJCA.
The economy grew an entire percentage point faster than initially projected, and the trend of American companies leaving the United States significantly slowed.
The path forward is clear – make tax cuts permanent to protect the prosperity we’ve already seen, and champion other pro-growth policies such as unleashing energy production and cutting government spending to stop the bureaucracy from crowding out the private sector.
The new Republican Congress should look to free market, pro-growth solutions rather than the tax-and-spend failures of the Biden administration. We’ve seen what happens with too much government control, and we’ve had enough.
So this is the choice before Congress – prioritize permanent tax cuts that drive us toward prosperity, or risk our financial future. Those of us in the pro-growth, pro-prosperity coalition will be throwing our full weight behind the former.
We are optimistic that Congress and the Trump administration will take action to do the same.