Republicans to push 10% middle-class tax cut next year

President Trump and the Republican leader of the tax-writing House Ways and Means Committee issued a joint statement Wednesday calling for a 10 percent middle-class tax cut after Congress begins a new term next year, although it’s far from clear which party will control the House after the midterm elections.

When Trump proposed the middle-class tax cut earlier this month, he reportedly took GOP leaders and his own administration by surprise (see Trump vows post-election vote on 10% tax cut that’s news to GOP). “We’re giving a middle-income tax reduction of about 10 percent,” he told reporters as he left the White House to speak at a campaign rally in Houston. “We’ll do the vote after the election.”

Up to then, GOP lawmakers had been focusing on the so-called Tax Reform 2.0 package in the House, which essentially would extend the tax breaks for individuals and pass-through businesses in the Tax Cuts and Jobs Act beyond 2025. The Tax Reform 2.0 package passed in the House, but has not yet advanced in the Senate. But Republican lawmakers scrambled to get their message in line with the president’s. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said that if Republicans keep control of the House they will advance legislation to provide the 10 percent tax cut (see Top GOP tax writer commits to Trump’s middle-class cut).

Andrew Harrer/Bloomberg

On Wednesday, Brady reiterated his support in what was billed as a joint statement with the president. “The House recently passed Tax Reform 2.0, locking in the tax cuts from the Tax Cuts and Jobs Act for families and small businesses in order to provide certainty while continuing to enhance America’s economic prosperity,” they said. “Tax Reform 2.0 reflects our shared commitment to the American people that we will never again wait 30 years to reform our nation’s Tax Code. We are not done yet. We know that when hardworking Americans — not Washington — are in charge of spending their own money, our economy grows and families are better off. We are committed to delivering an additional 10 percent tax cut to middle-class workers across the country. And we intend to take swift action on this legislation at the start of the 116th Congress."

The Tax Cuts and Jobs Act that Republicans pushed through Congress last December on a party-line vote was originally billed as providing middle-class tax cuts, but as it turned out, the biggest share of the tax cuts went to large corporations and the wealthy. While the corporate tax cuts were made permanent, most of the tax provisions for individuals and pass-through businesses are set to expire in 2025 in order to fit into the $1.5 trillion cost of the package.

The tax legislation has proven to be unpopular with many voters and has failed to become the campaign issue that Republican lawmakers had hoped it would be. Trump’s pledge for the 10 percent middle-class tax cut is viewed as a way to continue to use Republican control of the House as a way to promise further tax cuts in the future for voters.