Tax Cuts 2.0: Prospects post midterms
Rep. Kevin McCarthy, R-Calif., officially won a battle to lead the GOP in the House of Representatives on Wednesday, but even though McCarthy has played a key role in Republicans’ tax reform efforts, his re-election will likely not be enough to push another bill through Congress.
McCarthy will take over from Wisconsin Rep. Paul Ryan to become House Minority Leader. Both congressman helped the Trump administration pass a sweeping tax reform law nearly one year ago.
President Trump and the Republican Party intended to pass new tax measures to provide relief to middle-class Americans, but now that Democrats control the House of Representatives – that legislation is likely dead on arrival.
“I can’t see anything happening on taxes,” Chris Edwards, director of tax policy studies at the Cato Institute and editor of www.DownsizingGovernment.org, told FOX Business.
When asked about the future of tax cuts during a press conference on Wednesday, Trump said the prospects depend on cooperation from Democrats.
Even though Republicans pushed three separate tax packages through the House in September, Edwards said he didn’t expect them to be approved anyway – noting the only way that could’ve happened under Republican control was if the GOP used the fast-track process known as reconciliation.
Tax Cuts 2.0 aimed to make some of the reforms passed under the Tax Cuts and Jobs Act permanent, help families save more and provide a new tax break for startup businesses.
Trump also floated another “major” 10 percent tax cut for middle-class Americans in the weeks leading up to the midterm elections, which is also unlikely to advance.
Edwards said the next battle will be over making some provisions of the Tax Cuts and Jobs Act – like lower individual tax rates – permanent. But that will be a partisan battle closer to 2025, when many of the temporary measures are set to expire.
There is still one area where parties may work together to provide further relief to Americans, however, and that is in the form of pension reform.
Some of the retirement savings measures proposed in Tax Cuts 2.0 include encouraging the use of a Universal Savings Account, eliminating the contribution age limit for IRA accounts and making it easier for small businesses to work together to offer retirement plans.