A t a time of persistent record-high inflation rates, President Biden is proposing a multi-trillion-dollar tax hike. His plan includes allowing the Trump–Pence tax cuts to expire in 2025 and raising corporate rates, placing a massive burden on individuals and sending American jobs overseas.
Having served as the White House legislative-affairs director when Congress passed the 2017 Tax Cuts and Jobs Act (TCJA) — the largest tax-reform package in history — I witnessed how it catalyzed record growth. Its effects were uniformly positive for our country across every metric of economic health.
As a result of the TCJA, Americans had more money to spend, the government took in greater revenue, and businesses flocked to our shores. Annual tax revenue increased by 1.1 trillion from 2018 to 2023, a whopping 33 percent rise.
Wages for millions of Americans surged, with more than 400 companies announcing bonuses, new hires, or new investments in the United States. Despite recycled tropes from leftist economists that the TCJA provided tax cuts for billionaires, the share of wealth held by the poorest households increased, and the share held by the top 1 percent decreased.
Wages rose the fastest for low-income workers. The cuts invigorated the middle class, increasing income by nearly $6,000, alongside the lowest unemployment rate for Americans in a half century. The tide was rising, and fast.
Alongside deregulation, our tax policies arguably created the best environment for business ever in our country. The United States went from having a higher corporate rate than Communist China at 35 percent to a more competitive 21 percent.
As a result, over $1.5 trillion was repatriated to the United States from overseas. Small-business optimism broke a decades-old record, and manufacturing jobs finally returned to the United States after being decimated by the misguided policies of previous administrations.
Business was booming, and the American worker was back. Unfortunately, over the past few years, the Biden administration has incrementally undermined these gains.
Between 2020 and 2022, real household income fell by nearly 3 percent. The average inflation rate is 5.5 percent under the Biden presidency, second only to Jimmy Carter’s average of 10.3 percent.
Meanwhile, families have seen household energy prices climb by nearly 30 percent since January 2021, a pace 13 times faster than the past seven years. Soaring regulation has resulted in massive price increases on everyday items, costing families $1.939 trillion — or 7.4 percent of the U.S. GDP, a regulatory sum so large it would make for the world’s ninth-largest economy not including the United States — each year.
Allowing the Trump–Pence cuts to expire will slow the economy even further, resulting in less federal revenue, lower wages and household incomes, and more jobs heading to better environments overseas. Many of these jobs will, of course, move to China and Mexico, increasing U.S. supply-chain insecurity and helping U.S. competitors at the expense of the American worker.
The cascading effects could be truly catastrophic for the American people.
We know the TCJA grew the economy and increased government revenue. We should not be raising taxes to address the deficit or fund ballooning government programs.
With $34 trillion in debt the United States does not have a revenue problem, it has a spending problem. Congress continues to spend at the rate it did during a historic global pandemic, despite the pandemic’s being long over.
President Biden’s most recent budget proposal calls for a disturbing $7.3 trillion in federal spending, with the “Green New Deal–lite” expected to cost $428 billion more than its originally estimated $764.9 billion.
This trajectory is not sustainable. A multitrillion-dollar tax increase will only compound the problem and push our economy to the brink of collapse.
The tax increases included in Biden’s budget proposal are simply bad economics. The Biden administration does not want to raise taxes to help struggling Americans. On the contrary, it wants to raise taxes to fund its progressive agenda — one that does not include improving the quality of life for working Americans.
We must instead ensure that the Tax Cuts and Jobs Act endures and that America remains open for business.