In Sen. Josh Hawley’s (R-MO) continued attempt to cosplay as a man of the people, the banker’s son stands at odds with former President Donald Trump, the 2024 GOP nominee-in-waiting. Hawley recently blasted Trump’s signature legislative achievement, the Tax Cuts and Jobs Act of 2017, as not just a policy failure but heretical to religious dogma.
“In the choice between labor and capital, between money and people, it’s time for Republicans to get back to their Christian and nationalist roots — and start prioritizing the working man,” Hawley said during a July 9 speech at the National Conservatism Conference in Washington, D.C.
Hawley articulated this approach — touting his version of Republican populism — in a way that would seem to line up with the more nationalist-populist views of many Trump supporters. In economic terms, Hawley, regularly mentioned as a 2028 GOP presidential candidate, rejects Republicans’ long-standing free-market approach.
As the Atlantic noted in 2019, Hawley’s first year in the Senate, Hawley — a graduate of Stanford University, Yale Law School, and a former clerk to Supreme Court Chief Justice John Roberts — rails against income inequality, condemns the policy deference afforded to corporations, and speaks warmly about the civic value of labor unions. Moreover, the magazine added, “He is totally comfortable citing statistics popular on the progressive left,” including income disparity and wage stagnation.
So, it was not surprising that Hawley, at the National Conservatism Conference, implicitly rejected an extension of the TCJA, which is set to expire at the end of 2025.
“We are about to have a grand debate about extending tax cuts,” said Hawley, first elected to the Senate in 2018 after two years as Missouri’s attorney general. “Perhaps we should start with this question: Why should labor ever be taxed more than capital? They should not be. Why should families get less tax relief than corporations? Families should always be first.”
Hawley’s attack on corporate tax cuts is a thinly veiled swipe at the TCJA, which lowered the top bracket from 35% to 21%. That puts the United States on par with the average 23.7% corporate rate in the 38-member Organization for Economic Co-operation and Development. At the same time, European nations’ corporate tax rate average is 21%.
Beyond corporate tax rates, and contrary to the repeated claims of the liberal media, the individual income tax reform of the TCJA was progressive, both in theory and in practice. Marginal income tax rates were slashed across the spectrum, the standard deduction and child tax credit doubled, and the wildly regressive state-and-local tax deduction was capped at $10,000.
But the only way these individual and pro-family tax cuts were funded was through the corporate tax cuts that Hawley detests in the first place. It’s not just that the TCJA is now estimated to increase domestic capital stock by more than 7% in the next decade and real wages by 0.9%. This real overall economic growth has resulted in an unanticipated increase in corporate tax revenue.
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Sadly for Hawley’s parochial preferences, the reason for that growth in the overall economy and government revenues is not due to the individual tax cuts of the TCJA.
Furthermore, returns on capital grow the overall economy in a way that mere labor does not. In its most direct form, capital deepening — that is, the increase in capital stock relative to hours of labor — increases labor productivity itself. And that results in real economic growth that indeed trickles down both to wages and the overall number of jobs created. All of which ameliorates the problem Hawley prioritizes, “the astounding number of able-bodied men without good work,” far better than any government program.