5 Compelling Reasons to Make Trump’s Tax Cut Permanent

Comparing Trump and Biden’s Economic Philosophies with a Focus on Trump’s Tax Cuts

The contrasting economic ideologies of Donald Trump and Joe Biden are best highlighted by their differing views on the Trump tax cuts. Trump intends to make these tax cuts permanent, while Biden’s plan involves a rollback of the Tax Cuts and Jobs Act as a strategy for reviving America’s economy.

However, there seem to be numerous misconceptions regarding the Trump tax cuts. Hence, for the sake of clarity, let’s analyze the actual effects these tax cuts have exerted on aspects like jobs, the economy, tax fairness, and tax code simplification over the past five years.

The Impact of Trump’s Tax Cuts: Key Takeaways

1. Enormous Middle-Class Tax Cuts

   Trump’s tax restructuring brought one of the most significant tax cuts in US history for the middle class. The Treasury Department under Trump estimated that an average family of four saves about $2,000 yearly under this scheme. Repealing this act, as Biden plans, would potentially increase tax burdens for families earning less than $400,000 per annum. The House Budget Committee approximated this increase to be $1,500 annually.

2. Simplification of the Tax Code

   The tax reduction also led to a major simplification of the tax code for most Americans. Doubling the standard deduction from $12,500 to $25,000 was a significant component of this regulation. Hence, the necessity to itemize deductions and maintain documents related to various transactions for the IRS was reduced. Post these tax cuts, about 90% of Americans, including almost all those from the middle and lower incomes, opted for the standard deduction.

3. State Taxes for the Rich

   The ingenious element of Trump’s regulation was capping the deductibility of state and local taxes for the wealthy. This allowed high net-worth individuals in states like New York and California to pay billions less in taxes than their peers in low-tax states such as Florida and Texas. By doing so, the outdated law encouraging states to elevate their taxes was reformed, ensuring a fair distribution of federal tax burdens.

4. Boost to the Economy

   The Trump Tax cut not only stimulated the economy and business activity but surprisingly increased tax revenues. A report from Preston Brashers, a fiscal analyst at the Heritage Foundation, indicates that in its first four years, the tax cut raised more revenue than forecasted by the Congressional Budget Office without a tax cut. The House Budget Committee endorsed this by stating that the tax cuts stimulated economic growth by one percentage point more than anticipated, leading to annual revenues being $200 billion more than initially predicted.

5. Increased Taxes for the Rich

   Contradicting Biden’s popular claims, IRS data reveals that the top 1% of earners in America contributed a larger percentage (rising from 40% to 46% in 2022) to total income taxes collected after the tax cuts. This marked the highest contribution to taxes by the wealthy in history.

In conclusion, most of the negative assertions made by Democrats against Trump’s tax cuts in 2017 have been proven unjustifiable. Despite this, they continue to advocate for policies that would increase taxes on virtually all American corporations, small businesses, families, and investors. Hence, perhaps “Putting America Last” would be a more appropriate slogan for the Biden campaign.

Stephen Moore serves as a senior fellow at The Heritage Foundation and is a co-founder of the Committee to Unleash Prosperity. “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy” is his latest book. Read Stephen Moore’s Reports — More Here.

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