Call it the “Tax Cuts and Wall Act.”
Republicans, on the verge of a full sweep of government, are plotting immediate legislation to extend and expand tax cuts, bolster U.S. energy production and perhaps provide money to finish building the southern border wall.
Individual tax cuts passed under the Tax Cuts and Jobs Act of 2017 and signed into law by President Trump are set to expire after next year. Two business tax cuts have already been phased out. Extending those cuts is at the top of Republicans’ to-do list if they maintain control of the House.
The tax cuts could be far more expansive in the legislation Republicans envision.
Mr. Trump has called for lowering the corporate tax rate to as low as 15%. Congressional Republicans and Mr. Trump slashed it from 35% to 21% in 2017.
Mr. Trump also campaigned to eliminate taxes on Social Security income and earnings on tips. Those provisions could be shoehorned into the measure.
He promised to restore the deduction on state and local income taxes that was scrapped in the 2017 bill.
“The primary focus is simply on extending the Trump tax cuts and ensuring that we are on track to deliver on these campaign promises,” said a Republican aide familiar with the developing package.
House Majority Leader Steve Scalise, Louisiana Republican, said Friday that the measure could go well beyond taxes and include “more border security as well,” namely the border wall. He said other wish list items include provisions to reduce regulations and promote energy production.
How the tax cuts would be funded is unclear.
Mr. Trump campaigned on a proposed 20% universal tariff on domestic consumption of foreign-produced goods and an additional tariff of at least 60% on Chinese imports.
Tax Foundation senior policy analyst Alex Muresianu said universal tariffs of 10% to 20% would raise up to $3 trillion over 10 years.
Mr. Muresianu said the revenue would be needed to extend the expiring 2017 tax cuts. Further cuts on the wish list would add to a massive federal deficit that Republicans intend to reduce.
“I think every presidential campaign will bite off more than it can chew,” Mr. Muresianu said. “The Trump proposals, taken all together, would be very impractical, but I don’t think that’s necessarily unique.”
The nonpartisan Committee for a Responsible Federal Budget reported that Mr. Trump’s tax cut plans could add $7.5 trillion to the national debt over the next decade. Rep. Byron Donalds, Florida Republican and a Trump ally, disputed that figure on “Fox News Sunday.” He said the estimate “doesn’t take into effect the impact of lower tax rates and economic growth as a result.”
Money for border security is a top priority.
Mr. Trump promised voters he would immediately resume construction of the southern border wall. Congressional Democrats refused to fund the project during his first administration, and it was completely halted once President Biden took office.
Democrats are now more amenable to funding border security, thanks to rampant illegal immigration that likely played a role in their party’s election losses.
Republicans may circumvent Democrats entirely by adding wall funding to the tax measure. They plan to pass it using a budgetary tactic that will override the Senate’s 60-vote threshold and allow lawmakers to pass the bill with a simple majority. The Senate will be under Republican control in January.
The Republican plan hinges on the outcome of a slew of House election results that are still being tallied.
Analysts project House Republicans have a strong chance of holding on to their slim majority next year.
If they do, they will have the green light to move the tax cut package and any accompanying bills to the Senate.
A top Republican aide could not provide a specific timeline but told The Washington Times that Republicans will be moving quickly to put the package together.
Unlike 2017, when Mr. Trump’s surprise victory caught lawmakers flat-footed, Republicans have been working on the tax package in anticipation of Mr. Trump’s reelection to the White House.
“We are hitting the ground running,” the aide said.
• Susan Ferrechio can be reached at sferrechio@washingtontimes.com.
Please read our comment policy before commenting.