If Democrats take control of Congress in November, they will attempt to impose massive tax hikes in 2019.
With the midterms less than two months away, the Left has vowed to undo the Trump tax cuts as soon as they can and are already pushing new, trillion-dollar-a-year tax hikes. For instance, House Minority Leader Nancy Pelosi, D-Calif., has promised to undo the tax reform legislation as soon as possible, even comparing it to Armageddon. Not to be outdone, Senate Minority Leader Chuck Schumer, D-N.Y., referred to the bill as a “stunning deception.”
While this rhetoric may play well with the liberal base, it is far from the truth. In the real world, the tax reform legislation, known as the Tax Cuts and Jobs Act, has been a net positive for taxpayers, with 90 percent of wage earners seeing increased take-home pay. Thanks to the TCJA, a family of four with an annual income of $73,000 will see a tax cut of over $2,000, a 58 percent reduction in federal taxes. This same family of four will see almost $45,000 in higher take-home pay over the next decade, according to the Heritage Foundation.
The tax cuts have grown the economy, and businesses across the country have responded by giving their employees bonuses and pay raises and increasing retirement contributions, child care, and adoption benefits. Job openings are at a record high, while the unemployment rate is at an 18-year low. Quarterly GDP hit 4.1 percent in the second quarter of 2018 and is projected by the Atlanta Fed to remain strong at 3.8 percent in the third quarter. Since Trump took office, the economy is averaging over 3 percent growth — a 50 percent increase compared to economic growth under former President Barack Obama.
Republicans are eager to build on the successes of tax reform. Ways and Means Chairman Rep. Kevin Brady, R-Texas, recently released “Tax Reform 2.0,” a set of new legislation that aims to protect middle class and small business tax cuts, promote family savings, and encourage entrepreneurship.
On the other hand, Democrats have consistently downplayed, ignored, or misled the public about tax reform. Now, they are running to repeal tax reform and hike taxes. Senate Democrats have already proposed to raise taxes on businesses as part of a one trillion dollar tax hike that would make America’s corporate rate higher than almost every other developed country. This would undo a key reform of the 2017 bill — a globally competitive 21 percent corporate rate.
As a result of this and other pro-growth policies, the U.S. was recently named the world’s most competitive economy. Workers bear a significant portion (as much as 50 percent, 70 percent, or even higher) of the corporate tax, so the benefits of this competitive rate have resulted in investment, more jobs, and higher wages.
Other Democrats, such as much-discussed House candidate Alexandria Ocasio-Cortez, want to go even further by raising taxes to pay for new, socialist policies. Ocasio-Cortez, along with 150 sitting Democrats in the House and Senate, are pushing single-payer healthcare — a massive expansion of government that would impose a one-size fits all system of healthcare on the American people.
This government healthcare system would increase spending by $32.6 trillion over a decade, according to estimates by the Mercatus Center. It would require trillions of dollars in tax hikes on middle class families and small businesses, as Sen. Bernie Sanders’, I-Vt., 2016 presidential campaign admitted.
Sanders proposed a 6.2 percent payroll tax on businesses that would increase taxes by $10 trillion over a decade and a 2.2 percent payroll tax on families and individuals totaling $2 trillion. Sanders also proposed a $1 trillion income tax increase, an increase in the death tax, and a nearly $1 trillion capital gains tax increase. Though the Sanders plan understates the true cost of this massive expansion of government, these tax hikes would obliterate the positive economic news from the TCJA.
The contrast between the two parties is clear. Democrats are eager to push for higher taxes on the American people, while the GOP wants to build on the success of tax reform. If the Left has its way, Democrats will erode the strong economy, employee benefits, and higher take-home pay from the GOP tax cuts, and replace this positive economic news with stagnant growth, fewer jobs, and lower wages.
Alexander Hendrie is a contributor to the Washington Examiner’s Beltway Confidential blog. He is tax policy director at Americans for Tax Reform.
