House Republicans are poised to advance regressive taxation measures that would increase the federal deficit just weeks after they nearly blew up the global economy over ostensible concerns about the U.S. government's debt, eliciting condemnation from Democratic lawmakers and progressive advocates.
The Republican-led House Ways and Means Committee held a hearing Tuesday to mark up the so-called
American Families and Jobs Act (AFJA), which packages three bills: the Tax Cuts for Working Families Act, the Small Business Jobs Act, and the Build It in America Act.
This trio of bills—dubbed the "GOP Tax Scam 2.0" by the panel's ranking member, Rep. Richard Neal (D-Mass.)—would expand Trump-era tax cuts whose benefits flow overwhelmingly to corporations and the wealthy. In the wake of demanding—and winning—sharp reductions in anti-poverty spending along with other reactionary reforms during negotiations to raise the debt ceiling, the GOP-controlled House is now moving to starve the federal government of essential revenue.
"It didn't take long for the MAGA majority's alleged debt 'concerns' to go right out the window in pursuit of more wasteful tax breaks for their billionaire donors and corporations."
"It didn't take long for the MAGA majority's alleged debt 'concerns' to go right out the window in pursuit of more wasteful tax breaks for their billionaire donors and corporations that ship jobs overseas," Liz Zelnick, director of Economic Security & Corporate Power at Accountable.US,
said in a statement.
"If the recent past is prologue, the MAGA majority will try to pay for their trillion-dollar corporate tax giveaway on the backs of average Americans, including devastating cuts aimed at seniors, veterans, and the food insecure," said Zelnick. "Once again, the MAGA House majority has only corporations and the wealthy in mind."
Zelnick's sentiment was echoed by Democrats on the House Ways and Means Committee.
"This is the most ill-considered piece of legislation that I've witnessed in years in front of this committee," said Neal. "Just 10 days after our Republican colleagues were prepared to bring the nation to the brink of default... to the precipice, if not over the edge, they now come back with a tax cut."
"Apparently, the debt only matters if it's about spending, never about tax cuts," said Neal, who lamented "$10 trillion of tax cuts" enacted in 2001, 2003, and 2017—years when Republicans held both chambers of Congress and the White House.
Rep. Bill Pascrell (D-N.J.) derided what he called the GOP's "tax scam 2.0" as one of the worst sequels in history.
"After months of some of you actually liking the idea of keeping other people hostage, some of you are back to the single issue that unites your party: Tax cuts for the well-off," Pascrell said in a message to Republicans on the panel. "It's far past time to retire" the argument that "tax cuts 'pay for themselves.' They just don't. You can't prove it."
Among other things, the AFJA would expand corporate and business tax breaks enacted in the Tax Cuts and Jobs Act (TCJA) approved by congressional Republicans and signed into law by then-President Donald Trump in 2017.
If the new proposal were to pass, the richest 1% of U.S. households would receive $28.4 billion in tax cuts (an average of $16,560) next year, compared with $1.4 billion for the poorest 20% ($40, on average), according to Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy. Because foreign investors own a substantial share of stock in U.S. corporations, they would also receive $23.8 billion next year under the legislation.
House Ways and Means Chair Jason Smith (R-Mo.) has claimed that the cost of the tax cuts would be offset through a repeal of the Inflation Reduction Act's clean energy tax credits. But as Wamhoff explained in an analysis published earlier this week, deliberately hindering the nation's renewable energy transition would impose additional costs "in the form of greater climate damage."
Moreover, "the true costs are hidden by budget gimmicks," Wamhoff noted. "The most important budget gimmick is that the legislation enacts the biggest tax cuts for only two years even though its proponents plan to extend them in the future, making them, in effect, permanent."
According to the Committee for a Responsible Federal Budget: "The bill would cost $80 billion over a decade with interest ($19 billion before interest), including $320 billion through the end of fiscal year (FY) 2025. The smaller 10-year cost is driven by several factors but mainly by the fact that most of the bill's tax cuts expire at the end of 2025. We estimate that the plan would cost over $1.1 trillion ($950 billion without interest) through 2033 if these temporary tax cuts and extensions were made permanent."
The benefits of the 2017 TCJA "never trickled down," Americans for Tax Fairness tweeted. "Instead, the rich got richer and corporations made bigger profits. We should be repealing the Trump tax cuts, not making them permanent."
In a blog post published Tuesday, Chuck Marr and Samantha Jacoby of the Center on Budget and Policy Priorities also urged lawmakers to "reject this bill and pursue tax policy that works better for the country as a whole—not just wealthy investors and high-income households."
