Call it the “Tax Cuts and Wall Act.”
Republicans, on the verge of a full sweep of government, are plotting immediate legislation that would extend and expand tax cuts, bolster U.S. energy production and perhaps provide money to finish building the southern border wall.
Individual tax cuts passed under the Tax Cuts and Jobs Act of 2017 and signed into law by President Trump are set to expire after next year, while two business tax cuts have already been phased out. Extending those cuts are at the top of the to-do list for Republicans if they maintain control of the House.
The tax-cut plan, however, could be far more expansive in the legislation Republicans envision.
Mr. Trump has called for lowering the corporate tax rate to as low as 15%. It stands now at 21%, after the GOP and Mr. Trump slashed it from 35% in 2017.
Mr. Trump also campaigned on eliminating taxes on seniors’ Social Security checks, as well as on tipped earnings, and those provisions could be shoehorned into the measure.
And he promised blue-state voters that he would restore the deduction on state and local income taxes that was scrapped to raise revenue in the 2017 tax cut bill.
“The primary focus is simply on extending the Trump tax cuts and ensuring that we are on track to deliver on these campaign promises,” said a GOP aide familiar with the developing package.
House Majority Leader Steve Scalise, Louisiana Republican, said Friday the measure could go well beyond taxes and include “more border security as well,” namely the border wall. Mr. Scalise said other wish-list items could be added to it, including provisions to reduce regulations and promote energy production.
How the tax cuts would be paid for is unclear.
Mr. Trump campaigned on a plan to propose a 20% universal tariff on domestic consumption of foreign-produced goods, plus an additional tariff of 60% or more on Chinese imports.
Imposing universal tariffs by 10% to 20% would raise up to $3 trillion over ten years, said Tax Foundation senior policy analyst Alex Muresianu.
Mr. Muresianu said the revenue would be needed to pay for extending the expiring 2017 tax cuts. Including the GOP’s other wish-list cuts would cost much more and would add to a massive federal deficit that the Republican Party is intent on reducing.
“I think every presidential campaign will bite off more than it can chew,” Mr. Muresianu said. “The Trump proposals, taken all together, would be very impractical, but I don’t think that’s necessarily unique.”
Money for border security is a top Trump priority.
Mr. Trump promised voters he will immediately resume construction of the southern border wall. The wall project was hobbled during his administration by congressional Democrats who refused to fund it and was completely halted once President Biden took office.
Democrats are now more amenable to funding border security, thanks to rampant illegal immigration that likely played a role in their election losses.
But the GOP may circumvent Democrats entirely by adding the wall funding to the tax measure. They plan to pass it using a budgetary tactic that will override the Senate’s 60-vote threshold and allow lawmakers to pass the bill with a simple majority in the Senate, which in January will be under GOP control.
The Republican plan hinges on the outcome of a slew of House race results that are still being tallied.
Analysts project House Republicans have a strong chance of holding on to their slim majority next year.
If they do, they’ll have a green light to move the tax-cut package and whatever tags along with it to the Senate.
A top GOP aide could not provide a specific timeline but told The Washington Times that Republicans will be moving quickly to put the package together.
Unlike 2017, when Mr. Trump’s surprise victory caught the House GOP flat-footed, Republicans have already been working on the tax package in anticipation of Tuesday’s win that will return Mr. Trump to the White House.
“We are hitting the ground running,” the aide said.
• Susan Ferrechio can be reached at sferrechio@washingtontimes.com.