The U.S. is on the brink of a tax nightmare, with Democrats pushing the largest tax increase in history.
President Trump’s signature legislation from his first term, the 2017 Tax Cuts and Jobs Act, is set to expire at the end of the year, and Democrats are united in their efforts to end this successful policy and implement an automatic $4.5 trillion tax increase.
Republicans were elected up and down the ballot in 2024 with a mandate to end the lunacy of Bidenomics and make America competitive again. This means enacting bold tax reforms that go beyond simply extending the Trump tax cuts and — most importantly — preventing any tax hikes. Trump recently reminded Republicans that they cannot repeat the same mistakes that sank previous administrations. A tax increase of any kind would ruin any chance of success in 2026 for the Republicans as would failure to go beyond the tax cuts.
The tax cuts expire on Dec. 31. If Congress does nothing, an automatic $4.5 trillion Democratic tax hike will land squarely on working families, many of whom are already struggling under lingering Biden-era inflation. Less than a year from now, the average taxpayer could see a 22 percent tax hike. For a working family of four, that’s a $1,700 tax increase.
Despite the pain this would cause everyday Americans, Democrats are happy to let that happen so they can reap their own benefits at the ballot box. The fact that 85 percent of Americans support keeping the tax cuts in place seems not to matter. Their strategy is to let the law lapse and then blame Republicans for the consequences.
Republicans cannot let them succeed. Now that the House and Senate have passed a concurrent budget resolution, there is no time to waste in using the budget framework to extend and expand the Trump tax cuts through a final Reconciliation bill. Voters handed Republicans a mandate on economic policy. This is the test of whether they intend to do anything with it.
Letting the Trump tax cuts expire would mean higher taxes on 40 million families and 26 million small businesses. Small businesses would face a 43 percent top tax rate and family farms would be hit with significantly higher estate tax liabilities. Millions would suddenly find themselves in higher tax brackets, even if their real wages haven’t increased. The ability of businesses to immediately deduct their short-term capital investments would continue to phase out.
Despite all this, Democrats continue to push the false narrative that Trump’s tax cuts disproportionately benefit the wealthy, and that renewing them would balloon the deficit. Neither is true.
Since the 2017 reforms were enacted, federal tax revenue has risen by nearly 50 percent, far outpacing Biden-era inflation. Those reforms led to higher take-home pay for working families, record-low unemployment across all demographics, and increased investment in the United States. Small businesses flourished. Reduced corporate tax rates and immediate expensing of short-term capital investments made America more globally competitive, bringing jobs and capital back home. Wages for low-income and minority workers grew faster than they had in decades.
Democrats ignore these results because they don’t fit their narrative. Now, the left is hiding behind a national debt driven by excessive and wasteful spending to justify letting the tax cuts expire. It wasn’t the Trump tax cuts that added $1.5 trillion in spending for green energy subsidies, corporate handouts, and regulatory overreach. That was their misnamed Inflation Reduction Act — a bill that drove inflation and entrenched federal power over private enterprise.
We’re now living through the consequences of the Biden giveaways through distorted markets, rising costs, and a growing burden on American producers. And it highlights a more fundamental truth: Washington doesn’t have a revenue problem. It has a spending problem.
There’s a smarter path forward. Republicans, and Democrats claiming to be moderates, can extend and expand the Trump tax cuts while at the same time repealing the most bloated, distortionary pieces of the Inflation Reduction Act. Swap climate handouts for a tax code that rewards work, investment, and growth. The result will be a stronger economy, more opportunity, and more revenue without raising the deficit or the tax burden on working Americans.
Voters gave Republicans a clear mandate to deliver on the economy. That begins by stopping the Democrat’s $4.5 trillion automatic tax hike and preserving the tax relief that has already proven to work. Trimming the Inflation Reduction Act’s most wasteful and damaging provisions along the way would only strengthen the deal.
Surrendering to tired Democratic talking points would be a failure of leadership and a betrayal of the very mandate Republicans were elected to uphold. The success of the 2017 tax cuts speaks for itself.
Voters across the country are watching. Now it’s time to stand firm for the hardworking Americans who sent Republicans to Washington to restore fiscal sanity in the United States.
David McIntosh is president of the Club for Growth. He served as a Republican U.S. representative from Indiana from 1995 to 2001.
