WASHINGTON – House Republicans are preparing a package of tax cuts that they could adopt soon after Congress ends its debt ceiling crisis.
Taking over the tax legislation would represent a reversal of the recent focus by Republicans on reducing the federal budget deficit, as more tax cuts would further reduce government revenue.
“Obviously, we have to get over the debt ceiling,” said Rep. Darin LaHood (R-Ill.), a senior member of the House Ways and Means Committee, where tax laws are written. “But we are prepared to move forward with an economic package that I think will reflect what we’ve talked about a lot.”
LaHood said Republicans would consider how to “continue on the Tax Cuts and Jobs Act,” his landmark 2017 tax reform bill that cut corporate and household taxes by more than $1 trillion, as well as revive several tax breaks. business taxes that have expired or are currently being eliminated.
House Majority Leader Steve Scalise (R-La.) described it as “a great economic package that we’ve been putting together, securing tax cuts, addressing some of the regulatory issues that are holding back our economy.” .
Republicans used a budget trick to hide the full cost of their 2017 tax cuts by making some parts of the legislation temporary and canceling them at the end of 2025 with the expectation of a later extension. The Congressional Budget Office has estimated that extending those cuts would cost another $3.5 trillion over a decade. It’s unclear if Republicans intend to try to reauthorize all expiring provisions.
“For the people who are talking about fiscal responsibility right now, they will keep it until after we get past this crisis,” Rep. Suzan DelBene (D-Wash.) told HuffPost. “We need to get through this crisis, but they are already talking about fiscal policy and big tax cuts.”
House Speaker Kevin McCarthy (R-Calif.) called the national debt the biggest threat to America and insisted that Democrats accept spending cuts in exchange for allowing the federal government to continue borrowing money. If Congress can’t reach an agreement, the government could default on its bills in the coming weeks, which could hurt the economy.
“We need to get through this crisis, but they are already talking about fiscal policy and big tax cuts.”
– Rep. Suzan DelBene (D-Washington)
Democrats have said that Congress should reduce the budget deficit with tax increases, but McCarthy has argued that taxes are too high, aiming for a 24% ratio of tax revenue to the total size of the US economy by 2022. .
We have more money [than at] at one point arriving in the United States.” said thursday.
Last year’s number was likely an outlier, and recent data suggests that tax revenues have already fallen. In its most recent budget outlook, the CBO said revenue would hover around 18% of gross domestic product, or just slightly above the historical average, through 2033, even if the 2017 changes are allowed to expire.
Extending the cuts would very likely worsen the imbalance between spending and revenue, which is what creates the budget deficits that add to the debt each year.
LaHood suggested that Republicans could consider ways to reduce the impact of their proposed tax spending on the federal budget, but that it was more important to provide tax relief to households and businesses facing inflation.
“I think we’ll look at compensation there, but I think we’ll look at how we bring relief to the American people and families and that’s what we’ll focus on,” he said.
House Ways and Means Chairman Jason Smith (R-Mo.) said he expects the committee to approve the package before his birthday on June 16, Politico’s tax bulletin reported this week, just by subscription. A spokesperson did not respond to HuffPost’s request for comment.
Even if the House passes a Republican tax cut bill, the legislation is unlikely to pass the Democratic-controlled Senate.
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