The Tax Cuts and Jobs Act of 2017 (TCJA), passed during the Trump administration, lowered corporate taxes and reduced household tax rates. It’s scheduled to expire at the end of 2025.
As Republican presidential candidates hit the campaign trail and participate in debates, it’s crucial that they discuss making the Trump tax cuts permanent, rather than settling for a temporary extension.
The United States’ tax system is broken, and leadership rarely does anything to challenge the status quo. That’s what made the Trump tax cuts special. They were the most significant overhaul of the U.S. tax code in 30 years.
If these tax cuts were extended, the gross domestic product would increase by 2.2 percent, wages would rise by 1 percent, and the U.S. economy would add more than 1.5 million jobs.
The Brookings Institute notes that by the end of 2025, almost all of the individual, estate, and pass-through provisions of the TCJA will expire. This looming expiration creates an important opportunity to improve tax policy along multiple dimensions while evaluating TCJA provisions for possible extension.
Most Republican candidates have supported the Trump tax cuts, including former President Donald Trump, Florida Gov. Ron DeSantis, former U.N. Ambassador Nikki Haley, Sen. Tim Scott (R-S.C.), former New Jersey Gov. Chris Christie, North Dakota Gov. Doug Burgum, former Arkansas Gov. Asa Hutchinson, former Rep. Will Hurd (R-Texas), and former Vice President Mike Pence, who recently suspended his campaign.
Tech entrepreneur Vivek Ramaswamy has backed a flat 12 percent federal income tax but hasn’t commented on the Trump tax cuts.
As a member of the advisory board for Americans for Fair Taxation, I advocate the Fair Tax. The Fair Tax aims to eliminate income tax, payroll tax, estate tax, gift tax, and other wayward taxation methods. The Fair Tax strategy is revenue-neutral and will “neither raise nor lower taxes, so consumer costs remain stable.”
The Fair Tax will also cover all current government operations, including Social Security and Medicare.
Former Rep. John Linder (R-Ga.) founded the Fair Tax movement, which has been championed by leading Republicans since the early 2000s. Mr. Linder first introduced the Fair Tax Act (H.R. 2525) on July 14, 1999, to the 106th U.S. Congress. Since then, similar measures have been reintroduced in every session of Congress.
Along with libertarian radio talk show host Neal Boortz, Mr. Linder wrote “The FairTax Book” in 2005. Published by Regan Books, it went to No. 1 on the New York Times bestseller list, stayed there for two weeks, and remained among the top 10 for seven weeks.
While it’s hard to imagine such a book making the NY Times bestseller list today, the Fair Tax is a transcendent topic through generations of conservative voters.
In January, Rep. Buddy Carter (R-Ga.) introduced H.R. 25, the Fair Tax Act, to replace the current tax code with a national consumption tax known as the Fair Tax.
I had the opportunity to speak with Mr. Carter, and he gave me a quote specifically for this article:
“The Fair Tax is simple, pro-growth, and better for working Americans than the current system that taxes every single dollar you earn. It’s exactly the shock our broken system needs, and I am proud to champion this legislation in Congress.”
Support for the TCJA and the Fair Tax Act is wide-ranging among Republicans. In February, Rep. Vern Buchanan (R-Fla.) reintroduced the TCJA Permanency Act (H.R. 976), legislation that makes permanent tax cuts “for individuals and small businesses originally enacted as part of the Tax Cuts and Jobs Act (TCJA) of 2017.” More than 101 House Republicans co-sponsored the bill.
Republicans need to deliver. This is an important opportunity, and all GOP presidential candidates need to focus on making the TCJA permanent and passing the Fair Tax Act.
