As U.S. President Donald Trump and congressional Republicans plot more tax cuts for the rich at the expense of working people, a progressive think tank on Tuesday put out a policy brief detailing how those cuts and price-hiking tariffs would deeply harm working families.
The Center on Budget and Policy Priorities brief is part of CBPP’s “2025 Budget Stakes” series, which also includes documents on potential “painful cuts” for “vulnerable people” and the possible loss of health coverage, food aid, and rental assistance.
“High-income households and profitable corporations would grow even wealthier under Republican proposals for trillions of dollars in new or extended tax cuts,” the new report states, “even as Republican proposals for trillions of dollars of cuts to health assistance, food assistance, and other programs would leave more children in poverty, more families without stable housing, and more people without health coverage.”
“As a first step, Congress should let the 2017 tax cuts for households with high incomes expire on schedule.”
“The major tax law that President Trump and a Republican-controlled Congress enacted in 2017 was heavily skewed to households with high incomes,” the brief continues. “It was also expensive, costing $1.9 trillion over 10 years, according to the Congressional Budget Office’s 2018 estimate. And it failed to deliver the economic gains its backers promised; studies found the benefits didn’t ‘trickle down’ to most workers.”
The current debate over taxes in Washington, D.C. is happening not only because Republicans now control the White House and both chambers of Congress, but also because key parts of the GOP’s Tax Cuts and Jobs Act of 2017 expire at the end of this year.
The CBPP brief warns that extending the expiring provisions from what critics called the “GOP Tax Scam” would:
- Do relatively little for households with low or middle incomes;
- Add trillions in debt, much of it to benefit the wealthy;
- Worsen racial inequities; and
- Weaken the nation’s ability to fulfill our commitments to seniors and meet national needs and challenges.
The document features a section on the Internal Revenue Service, which explains that “during the 2010s, steep budget cuts imperiled the IRS’ ability to serve taxpayers and enforce the nation’s tax laws. But funding from the 2022 Inflation Reduction Act is helping the IRS dramatically improve its customer service, operate the direct file mechanism so people can file their taxes directly with the IRS for free, and modernize and improve its tax enforcement efforts.”
“Those efforts are already paying off in cracking down on tax cheats and ensuring that wealthy people pay more of the taxes they owe,” the brief notes. “But Congress has already canceled some of the new enforcement funding, and Republican budget proposals call for repealing the rest.”
Although Trump on Monday struck deals with the Canadian and Mexican governments to delay 25% tariffs on goods from the United States’ neighboring nations, CBPP also sounded the alarm about Trump’s campaign promises regarding the taxes.
“Research shows that the extra costs imposed by these tariffs are passed on to consumers; the tariffs announced February 1 would cost a typical middle-income household around $1,200 per year, according to one estimate,” the brief states. “Tariffs can also provoke trade wars, which can harm domestic businesses.”
The document argues that “instead of extending and expanding costly tax breaks for those who least need help, Congress should create a more equitable federal tax system that raises revenue sufficient to meet the nation’s needs and requires wealthy households and corporations to pay their fair share.”
“As a first step, Congress should let the 2017 tax cuts for households with high incomes expire on schedule,” the brief says. “Congress also should expand the child tax credit, especially for the roughly 17 million children who don’t receive the full credit today because their families’ incomes are too low, and expand the earned income tax credit for workers not raising children in their home, who now receive little or nothing from the credit.”
“In addition, Congress should scale back corporate tax breaks and reduce the special tax breaks enjoyed by very wealthy households that shield their considerable income from taxation,” the report concludes. “And Congress should provide the IRS with the funding it needs to enforce the nation’s tax laws and better ensure that wealthy people and corporations pay the taxes they legally owe.”
