After threatening to force the government into default over the debt ceiling, Republican lawmakers Friday introduced new tax cuts that could add at least $21 billion to the federal debt over the next decade.
Three new GOP-backed bills would cut taxes for large companies, small businesses, and individual families while reducing clean energy tax incentives to pay for it.
“It’s Republican clockwork,” the ranking member on the Ways and Means Committee Rep. Richard E. Neal (D-Mass.) said in a statement. “Not even a week after their manufactured default crisis and it is back to tax cuts for the wealthy and well-connected.”
“Not even a week after their manufactured default crisis and it is back to tax cuts for the wealthy and well-connected.”
“This stoops to a new low even for them: retroactive corporate tax cuts, next-to-nothing for the most vulnerable children and families, and sneaking in favors for Big Oil,” he continued. “Make no mistake about it, they are laying the groundwork for even bigger cuts in 2025, and the only way they will ever achieve a balanced budget is by sticking seniors and working families with the bill.”
Yesterday, the latest #GOPTaxScam was introduced. Not even a week since Republicans brought our nation to the brink of economic ruin, and they are already two-stepping into tax cuts for the wealthy and well-connected.— Rep. Richard Neal (@RepRichardNeal) June 10, 2023
My full statement ⬇️ https://t.co/W4jFSGiWZ2
The cuts come in the American Families and Jobs Act, introduced Friday by Ways and Means Committee leader Rep. Jason T. Smith (R-Mo.). That act is comprised of three different bills.
The first, The Washington Post explained, would reinstate corporate tax breaks related to spending on interest, equipment, and research for a limited time.
It would also roll back some provisions of the Inflation Reduction Act (IRA) by limiting tax credits for electric vehicles, barring tax payers from using those credits for used vehicles, ending tax credits to incentivize clean energy production and investments, and repealing a tax on toxic chemical waste sites.
The elimination of the green energy tax credits are expected to pay for $216 billion of the tax cuts’ $240 billion price tag over the next decade, POLITICO reported.
Neal pointed out the ironic timing of the proposed swap, noting that, “while Americans are sheltering inside to avoid the fallout of climate-spurred wildfires, Republicans think now is a good time to repeal the largest climate investment in our history to pay for their corporate handouts.”
“While Americans are sheltering inside to avoid the fallout of climate-spurred wildfires, Republicans think now is a good time to repeal the largest climate investment in our history to pay for their corporate handouts.”
The second and third bills would increase deductions for families making less than $400,000 over the next two years and get rid of a requirement that taxpayers report Venmo or similar transactions over $600, a measure aimed at small businesses, The Washington Post explained.
“These policies will provide relief for working families, strengthen small businesses, grow jobs, and protect American innovation and competitiveness,” Smith said in a statement.
.@WaysandMeansGOP just introduced the American Families and Jobs Act to give families and small businesses a fighting chance in Biden’s economy:— Rep. Jason Smith (@RepJasonSmith) June 9, 2023
✅ Put money in families’ pocket stolen by inflation
✅Help small businesses grow
✅Secure our supply chains pic.twitter.com/qxYXhAQjgt
However, White House spokesperson Karine Jean-Pierre called them a “tax scam,” as Reuters reported, adding that the GOP’s “priority isn’t reducing the deficit or out-competing the world, their priority is giving handouts to rich special interests and corporations at the expense of everyone else.”
Exactly how much Republican plans would add to the deficit is a matter of debate. The nonpartisan Join Committee on Taxation calculated a total of $21 billion over the next 10 years, The Washington Post reported.
However, the bills extend Trump tax breaks for businesses through 2025, but Republicans have said they would like to make them permanent. If they succeeded, it could cost the government a little under $500 billion, the Tax Policy Center said, and the dividend would largely go to high-earning Americans.
“If House Republicans were actually serious about the deficit, they would demand wealthy corporations pay their fair share in taxes,” Liz Zelnick, director of Accountable.US’ Economic Security & Corporate Power, said in a statement responding to the new bills. “Instead, they’re giving billions in wasteful tax giveaways to greedy corporations, instead of making critical investments in American families and communities.”
Correction:An earlier version of this article referred to the overall federal debt as the “national deficit,” which is yearly. It has been corrected with the proper term.