Allies of President Donald Trump are urging Congress to quickly take up and enact a tax cut package that permanently extends provisions of Trump’s 2017 tax law to keep them from expiring at the end of the year and causing Americans’ tax bills to rise.
Economist Steve Moore, the co-founder of the Committee to Unleash Prosperity, spoke with FOX Business in an interview about the formation of the Tax Cut Victory Alliance, a new coalition of taxpayer groups, business leaders, state organizations and grassroots activists that will advocate for a permanent tax cut bill.
The group is launching an advertising campaign aimed at helping build support for Congress to take action on the tax cut package quickly to prevent the expiration of the 2017 tax cuts, which would effectively be a tax hike for many American households.
“The most important priority is to make everything that was in the Trump tax cut of 2017 permanent, so it doesn’t go away,” Moore said. “Most of those features would go away at the end of this year if we don’t make this happen. So that is a giant priority.”
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Moore said that making the tax cuts permanent will ensure that American companies can compete with their peers overseas. The 2017 tax law lowered the corporate tax rate to 21% from 35%, which was one of the highest rates in the world, and also included provisions that have helped small businesses.
“We especially want to make sure that the business tax rates remain low so America remains competitive when we compete against China and Germany and Japan and other countries,” he explained. “There’s a big small business tax cut that really benefited our 35 million men and women who run small businesses and are the backbone of our economy.”
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Most American households saw their overall tax burden decrease following the enactment of the law known as the Tax Cuts and Jobs Act (TCJA), and Moore said that if the tax code reverts to pre-TCJA tax policies it would cost average American households thousands of dollars next year.
“The average family saved about $3,000 in their tax bill every year from that tax cut, and incidentally, if this doesn’t get done, they’re going to pay $3,000 a year more in taxes next year, which is something nobody wants to see,” he said.
Moore said that the Trump administration and Republicans in Congress need to make enacting the tax cut extensions a priority, saying that an ideal goal would be to have it signed into law around Memorial Day to encourage businesses to more quickly incentivize further investment in America and provide a boost to financial markets.
“If Trump has made any mistake in his first couple of months in office, I think it’s that he hasn’t made this the first priority, and I think it should be because the sooner we get this signed, sealed and delivered, the faster you’re going to see the stock market roar back to life,” he explained.
“You’re going to see businesses hiring more workers than ever before. You’re going to see a lot of investment. And Trump has talked about this, that we’re already starting to see some of these companies, hundreds and hundreds of billions of dollars being invested here in the United States.”
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Moore went on to explain that the president has “a lot of political capital to get this done, and if it’s going to happen, it really rests on the president’s shoulders – he’s the one who can get this through.”
“Once Trump intervenes and flexes his political muscle here and gets the Senate and the House together, we sit down at the table, we get this thing done, you’re going to see a big economic boom in this country,” he said.
He also pushed back on concerns raised by Democrats as well as some deficit hawks about the potential impact of the tax cut extension on federal budget deficits, arguing that revenues rose in the wake of Trump’s first-term tax cut bill.
“Many Democrats are saying this would be a $4 trillion increase in the deficit if we pass this tax cut. But that’s wrong, the same people who said this was going to cost the Treasury $4 trillion are the same people, five or six years ago when we passed the bill originally, who said it’s going to be a massive revenue loss. But guess what? The revenues of the federal government went up,” he explained.
“When more people are working and businesses are more profitable, that’s when you get tax revenues up,” Moore said. “For those who are concerned about the budget deficit, and I’m certainly one of those… we need to make sure we have a robust, strong economy because getting people working is the best way to reduce our debt.”
