Trump budget bill failure could lead to ‘largest tax hike in history,’ lawmaker warns

EXCLUSIVE: The chairman of the largest House GOP caucus is using Tax Day to send a warning about the financial strain American families could face next year if Republicans fail in their plans for a massive conservative policy overhaul.

Republican Study Committee (RSC) Chairman August Pfluger, R-Texas, told Fox News Digital that millions of Americans could see their taxes increase by as much as one-fifth if Congress does not pass a budget reconciliation bill extending President Donald Trump’s 2017 Tax Cuts and Jobs Act (TCJA).

“If Democrats get their way and let these tax cuts expire, Americans will be crushed by the largest tax hike in history – a 22% increase hitting 40 million families and 26 million small businesses,” Pfluger said. 

“It’s time to lock in these historic tax cuts permanently to boost job creation, fuel America’s economic engine, and protect family budgets from the Left’s tax-and-spend agenda.”

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The RSC acts as the House GOP’s de facto conservative think tank and has more than 175 members. Pfluger reiterated that the group is “fighting to make President Trump’s historic Tax Cuts and Jobs Act permanent, so families can keep more of their hard-earned money instead of sending it to the IRS.”

Rep. Beth Van Duyne, R-Texas, chair of the RSC budget task force, said extending the TCJA and enacting Trump’s other tax policy initiatives would help the U.S. become “the most advantageous country in which to invest, relocate, or expand a business” as well as helping families and businesses domestically.

“These vital, pro-growth tax reforms will work alongside our efforts to slash federal regulations and bureaucracy to empower economic expansion and financial security for the American people and our job creators,” she said.

Tax reform is a cornerstone of Republicans’ efforts on reconciliation, a mechanism that allows the party controlling the major levers of government to enact sweeping fiscal and budgetary changes. It does so by lowering the Senate’s threshold for advancing legislation from 60 votes to 51, provided the matters in the bill deal with taxes, spending and the national debt.

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In addition to extending the TCJA tax cuts, Trump also wants Republicans to eliminate taxes on tipped and overtime wages, as well as on Social Security benefits for retirees.

House Republicans passed a framework last week to sync up with the Senate on its budget reconciliation bill, which now allows the relevant congressional committees to begin work filling out that framework with policy.

But congressional Republicans have a long road ahead to get a bill passed in both the House and Senate, where their majorities are currently three seats each. The House version calls for at least $1.5 trillion in spending cuts, while the Senate’s baseline is $4 billion – though Republicans there vowed to strive for more.

Extending TCJA alone would decrease federal revenues by $4.5 trillion, according to the Tax Foundation, and House conservatives are leading the charge in demanding steep government funding cuts to offset that.

The RSC steering group, the group’s leadership arm, released an official position earlier this year calling for reconciliation legislation to be deficit-neutral. 

At the same time, however, failing to extend Trump’s tax cuts ahead of the 2026 midterm elections could have politically devastating consequences, while stoking fears of an economic downturn when compounded with the added cost of Trump’s sweeping tariffs.

“If the tax cuts expire, the median family would lose about $1,000,” Kimberly Clausing, nonresident senior fellow at the Peterson Institute for International Economics, told Fox News Digital earlier this month, citing a model from the Urban-Brookings Tax Policy Center. 

And if the recently unveiled tariffs continued unabated at the time, “that would generate an average per household consumer loss of $3,800,” she added, pointing to the Yale Budget Lab’s estimate. Trump has since walked back much of his reciprocal tariff policy. 

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The House Ways and Means Committee, the House’s tax-writing panel, released a memo late last year with a similar warning to Pfluger’s on a potential tax hike if TCJA is not extended.

“Congress needs to act swiftly to take this threat of a tax hike off the table and give the American people assurances that the relief they have been demanding has arrived,” the December memo said.