Debate: Trump, DeSantis, and 2024 GOP candidates’ tax policy stance.
The First Republican Presidential Debate: Up For Debate
The first Republican presidential debate is fast approaching on Aug. 23, when candidates will hope to close the gap on former President Donald Trump and separate from the rest of the pack. In this series, Up For Debate, the Washington Examiner will look at a key issue or policy every day up until debate day and where key candidates stand. Today’s story will examine tax policy.
A Key Issue: Tax Policy
A key issue that any prospective presidential administration will face is how to handle tax policy, and taxes will undoubtedly be discussed during the first debate of the GOP primary season.
The 2017 Tax Cuts and Jobs Act was the biggest revamp of the federal tax code in years and the biggest fiscal policy change during former President Donald Trump’s time in office. Many of the provisions in the law are scheduled to sunset shortly after the 2024 elections and some already have. Extending those tax changes will likely be one of the first legislative challenges should a Republican oust President Joe Biden next year.
The expiring tax provisions, commonly referred to as the “Trump tax cuts” or “Republican tax cuts,” coupled with a looming debt limit expiration, have created a massive fiscal cliff set to hit in early 2025.
Up For Debate: Where Trump, DeSantis, and Rest of Republican 2024 Field Stand on Key Issues
The stakes are high. If Republicans overperform in 2024, winning the White House and both chambers of Congress, they could rewrite and expand those tax breaks. If Democrats amass majorities in Congress, though, they could achieve wish list changes such as more taxes on the wealthy and a higher corporate tax rate.
Here is where the candidates stand on taxes:
Donald Trump
Trump will tout his namesake tax package as proof of his low-tax bona fides. The package was a massive success for Republicans who were able to push the deal through the Senate with the unified support of the entire Republican conference.
Among other things, the tax package lowered the corporate tax rate to 21% from 35% and lowered individual income tax rates.
Some of the provisions set to expire include lower individual income tax rates and the ability for pass-through businesses to take a 20% deduction. The 2017 tax law also doubled the estate tax exemption, also known as the “death tax.” That allowed people to keep more of their inheritance before being hit by federal taxes. Additionally, the $10,000 cap on deductions for state and local taxes paid is set to end. The cap was introduced as a pay-for by Republicans, as the deductions largely benefit wealthy people in high-tax states.
Trump is expected to talk about the tax package during the debate and will point to it as part of the reason why the economy was humming along so well prior to the pandemic. Just before COVID began ripping through the country, the unemployment rate was at an ultra-low 3.5% and gross domestic product growth was positive.
Some barbs that Trump could face are how his signature tax plan, and potential extensions, affect the national debt and deficit. The Committee for a Responsible Federal Budget released a report this week that found that extending the TCJA without offsets would cost over $3.3 trillion through the next decade and boost debt to 125% of GDP by 2033.
But Trump and his allies have argued that the tax plan pays for itself in the long term by unleashing increased growth and spending.
Ron DeSantis
Trump’s closest contender, while still far off in the polling, is Gov. Ron DeSantis (R-FL). DeSantis generally prefers lower taxes and was one of the Republicans who voted for Trump’s 2017 tax cuts while he was serving as a congressman from Florida.
DeSantis’s time in Congress and his record on tax policy as Florida’s governor will likely be scrutinized during the debate later this month. Trump’s campaign, which is known for branding opponents with different antagonizing names, has dubbed DeSantis “Ron DeSalesTax” because of his support for the Fair Tax Act of 2015, which would have imposed a 23% sales tax.
Proponents of a so-called fair tax envision simplifying the tax code by scrapping the income tax, payroll tax, corporate taxes, gift taxes, and the estate tax altogether and replacing them with a nationwide consumption tax on goods and services.
While it is true that DeSantis offered support for the plan, which had virtually no chance of becoming law, he will argue that the higher sales tax involved would not have increased the tax burden for families because it would have been offset by lower or eliminated levies in other parts of the tax code.
DeSantis will likely highlight his record as governor during the debate. In February, DeSantis announced a plan to offer the largest tax relief program in Florida’s history. The plan would save taxpayers in the state some $2 billion during fiscal 2024, according to the governor’s office.
He also approved a yearlong program that provides taxpayers with toll payment relief. The plan automatically gives customers with at least 35 monthly toll transactions a 50% credit to their account.
Tim Scott
Sen. Tim Scott (R-SC) is another candidate who will be looked at through the lens of what policies he has supported while on Capitol Hill. He has been a stalwart against higher taxes and, like DeSantis, voted for the historic 2017 tax cuts.
More recently, Scott, who is chairman of the powerful Senate Banking Committee, has vociferously pushed back against the efforts of the Biden administration and congressional Democrats to supercharge the IRS with funding.
Democrats contend that imbuing the IRS with more money will allow it to better handle its massive job and thus recoup more tax revenue, lowering the deficit. Republicans, though, saw the infusion as something that will lead to more audits for working-class Americans and fear potential weaponization within the tax agency.
Earlier this year Scott introduced the IRS Accountability and Taxpayer Protection Act, which is a piece of legislation designed to prohibit the IRS from using penalties to bargain for resolutions more favorable to the agency.
“When an IRS agent comes knocking on the door of the wealthy, they’re met with lawyers and legal fees; however, working-class Americans aren’t afforded this luxury,” Scott said in a statement. “I won’t stand for President Biden and congressional Democrats shaking down the American middle class to pay for their radical, socialist agenda, and I encourage the Senate to take up my legislation to provide meaningful protections for hard-working people.”
Nikki Haley
Former South Carolina Gov. Nikki Haley, who also served as Trump’s ambassador to the United Nations, generally supports lowering the country’s tax burden, in addition to cutting spending and lowering the country’s deficit. She was a supporter of the 2017 tax cuts and said the plan “put more money in the pockets of hard-working Americans.”
“Some of the biggest relief went to low- and middle-income families — those earning between $25,000 and $100,000. Millions got bonuses and wage hikes, too,” she said.
Haley veers from Trump in her support for some form of entitlement reforms, though. Despite her support for some entitlement reform, in a June interview with the Washington Examiner she pledged she “would not raise taxes” to fund the coming shortfalls for Medicare and Social Security.
Vivek Ramaswamy
Vivek Ramaswamy, who gained prominence for his fierce opposition to corporate environmental, social, and governance investing, supports cutting taxes in order to spur economic growth.
During a recent interview with the Wall Street Journal, the 38-year-old entrepreneur said that his tax policy envisions tax rate cuts for both individuals and businesses.
“So if I’m governing as president, absolutely, corporate tax rate cuts as well as individual tax rate cuts, in a way that also squeezes out the, let’s just say the regulatory-industrial complex of the tax arbitrage created out of the complex tax code that we have,” Ramaswamy said.
Others
Of all the Republican presidential contenders besides Trump, former Vice President Mike Pence might have the closest ties to the 2017 tax changes. Pence has praised the law and viewed it as a major achievement from the days of the administration.
Another contender, former New Jersey Gov. Chris Christie, who has made headlines for supporting entitlement reform, including raising the retirement age, took an interesting stance on the $10,000 cap on deductions for state and local taxes that was imposed by the 2017 tax cuts.
Christie told Bloomberg that he would keep it in place, even despite many Republicans from his state wanting it to be lifted or eliminated.
“I don’t think that the rest of the country should be paying for the excessive taxes that we had in New Jersey, and New York, and Illinois, and California,” Christie said.
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