Washington Examiner: Will Kamala Harris Let the Trump Tax Cuts Expire?

During last week’s presidential debate, Vice President Kamala Harris claimed to be the only candidate with a plan to help working-class people. But when given the opportunity to outline her economic vision, she avoided policy specifics, using red herrings about billionaires and big corporations. She claimed, for example, that the 2017 Trump tax cuts were “tax cuts for billionaires.”

This misleading rhetoric was meant to distract voters from reality — her tax plan would result in tax hikes for most people, whereas Republican tax reform reduced taxes for people of all income groups.

Harris and Democrats still need to answer a fundamental question: Will they allow the Tax Cuts and Jobs Act to expire and inflict multitrillion-dollar tax hikes on the middle class?

While anti-billionaire rhetoric may sound good on the campaign trail, the reality is that the TCJA changed the individual provisions of the tax code to allow taxpayers of all incomes to keep more of their hard-earned money. And unless Democrats join Republicans in extending these popular provisions, people will face a more than $4 trillion tax hike in 2026, the largest in U.S. history. The middle and working classes, those making under $400,000 per year, will be hit hardest.

Despite Democrats’ continued mischaracterizations, the TCJA provided a tax break to 80% of people, and middle-class taxpayers received the largest proportional benefit of the cuts. Under the improved tax system, the highest-income earners actually paid a greater share of total taxes than they did before the law’s enactment.

If the TCJA expires next year, the Tax Foundation estimates that a single mother of one making $30,000 per year will pay more than $1,000 in higher taxes. A family of four making a median household income of $75,000 is estimated to face a tax increase of more than $1,500.

In addition to lowering rates, the TCJA dramatically helped low- and middle-income families by doubling the standard deduction and simplifying the tax filing process. Before TCJA, 47 million taxpayers went through the time-consuming process of itemizing their tax deductions. With a larger standard deduction, fewer than 15 million people itemize and about 9 in 10 taxpayers now simply take the standard deduction, saving time and money.

The law also significantly reduced the impact of the alternative minimum tax, a stealth tax that required some families, especially those running small businesses, to calculate their tax liability twice. Prior to the TCJA, more than 5 million taxpayers were hit by the unnecessary AMT, compared to around 200,000 after the bill’s enactment. This simplification alone is estimated to have saved taxpayers $4.6 billion in compliance costs. To let these common-sense provisions expire would mean a more expensive and burdensome tax experience for millions of families.

The TCJA also expanded the child tax credit, doubling the maximum credit from $1,000 to $2,000 for working families and increasing its refundability for lower-income earners. Crucially, the larger credit continued to link benefits to work, incentivizing steady employment and ensuring that the credit was paired with a long-term path to upward mobility.

By doubling the child tax credit, lowering rates, and increasing the standard deduction, Republicans provided targeted tax relief to the middle class. In fact, it was the bottom 50% of earners who received the largest reduction in average tax rates, at about 17.3%.

Critics have claimed that the TCJA created loopholes for the top 1%, but the bill actually took steps to limit tax breaks for wealthy people. For example, TCJA limited the state and local tax deduction, which is effectively a subsidy for many high-income residents in high-tax states such as California and New York.

People across the board benefited from a roaring economy in the wake of TCJA. During the period after its enactment and before the pandemic, workers got ahead as household incomes increased and every tax bracket and demographic benefitted from a strong labor market. Real median household incomes grew by more than $5,000, and the largest wage increases were seen by the lowest-earning workers.

These benefits also accrued to historically disadvantaged groups — the unemployment rates for black and Latino voters and those without college degrees, fell to historically low levels. We must protect and build on this proven tax formula and enable all people to benefit from a strong economy.

While Congress prepares for the tax debate ahead, it is critical that people understand what’s at stake. The TCJA provided meaningful tax relief and created economic opportunity for individuals at every income level.

While Democrats continue to pledge they will not increase taxes on anyone making less than $400,000 per year — a figure that is now closer to $487,000 when adjusted for inflation — allowing these sweeping reforms to expire would result in a more than $2 trillion tax hike on this group.

Heading into 2025, Senate Republicans will focus on preventing massive tax hikes on working families and investing in U.S. families and jobs. Whether Democrats and their presidential nominee share that commitment remains to be seen.

Mike Crapo is a U.S. senator for Idaho and the ranking member of the Senate Finance Committee.

###