Doing nothing is not an option as a historic tax hike looms over America’s middle class

The desire of the Republican hardliners to balance the budget — and in doing so protect further generations from drowning in debt — is surely an admirable one. 

But while saving future generations from economic pain is a worthy endeavor, many Americans are suffering economic pain right now, and lost in the fight over the budget has been any meaningful discussion of how Washington can alleviate that pain. 

One meaningful way to do this would be to make the 2017 Tax Cuts and Jobs Act permanent, a desire that should be at the top of every Republican’s agenda – and should also appeal to any Democrat looking to prove to voters that they’re serious about helping those who are struggling.

Set to fully expire in 2025, the Tax Cuts and Jobs Act (TCJA) helped breathe new life into the American economy while putting more money in the pockets of people at every income level. 

A research study from the Dallas Federal Reserve found that the TCJA resulted in “an income tax cut equaling 1 percent of GDP” that “led to a 1.2-percentage-point faster job growth and nearly 1.5 percentage points higher GDP growth over two years following the law change.”

Under the TCJA, the tax rate on the top income tax bracket decreased from 39.6% to 37%, the 33% bracket rate fell to 32%, the 28% bracket went to 24%, the 25% bracket to 22%, and the 15% bracket to 12%. Furthermore, and perhaps more importantly, the TCJA more than doubled the amount of the standard deduction for all taxpayers. 

The standard deduction for single payers went from $6,350 to $13,850, the standard deduction for married couples went from $12,700 to $27,700, and the standard deduction for heads of household and surviving spouses went from $9,350 to $20,800. 

Americans are already struggling and suffering under a bad economy marred by malaise and inflation. If the TCJA is allowed to expire, working Americans will suddenly find themselves navigating perilous economic waters while paying significantly more income tax. This will be a devastating blow to countless American families. 

Unfortunately, though, we don’t need to wait until the end of 2025 to see what the expiration of the TCJA means for the economy. Two core provisions of the TCJA that were key to the economic growth America saw prior to the COVID crisis are already being phased out: the bonus depreciation tax deduction and the Opportunity Zones tax credit.

Until this year, under the TCJA any qualified business could get bonus depreciation of 100%. For this year it’s 80%, next year it will be 60%, and 40% the year after that. The credit for investing in Opportunity Zones – which were created to incentivize development in disadvantaged, largely minority communities – is similarly sunsetting year by year. 

These provisions are vital for small business owners seeking to preserve capital that can be invested back in their businesses, their employees, and their communities. When these provisions are fully expired, that extra capital will be fully gone, another devastating blow to countless Americans. 

Working- and middle-class families, as well as small businesses and their owners and employees, benefited equally from the TCJA. If the TCJA is not made permanent, they will suffer equally, as will the economy overall. These are the individuals and businesses that once made up the backbone of the American economy, they were the very fabric of the American Dream, and they need help now.

That politicians in Washington aren’t fighting harder to protect the TCJA is astounding and, quite frankly, shameful. No matter what one thinks about the man, the TCJA is surely one of the crowning economic achievements of the Trump’s presidency, and one which politicians on both sides of the aisle who truly care about their constituents’ economic security should seek to support.