{"id":2641706,"date":"2026-08-07T07:38:01","date_gmt":"2026-08-07T11:38:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supply-siders-push-back-on-paxton-tax-plan\/"},"modified":"2026-08-07T07:41:53","modified_gmt":"2026-08-07T11:41:53","slug":"supply-siders-push-back-on-paxton-tax-plan","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supply-siders-push-back-on-paxton-tax-plan\/","title":{"rendered":"Supply-siders push back on Paxton tax plan"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsupply-siders-push-back-on-paxton-tax-plan%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2641706&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Supply-side economists criticise Texas Senate hopeful Ken Paxton&#8217;s tax proposal for undermining customary Republican principles of broadening the tax base and lowering rates. Paxton, Texas Attorney General and candidate against Democrat James Talarico, has proposed a plan that includes tax breaks for housing, healthcare, and children, aimed at voters concerned about living costs.the plan features detailed deductions for medical expenses, home purchases, and healthy living, as well as increased child tax credits and programs like the Trump Accounts.<\/p>\n<p>However,many experts,including critics from the libertarian Cato Institute and the Tax Foundation,argue that the plan departs from conventional tax reform,which typically seeks to simplify the tax code and reduce rates by broadening the base. They contend Paxton&#8217;s proposal might increase prices by boosting demand without supply increases and could complicate the tax system, all while not lowering rates as traditional free-market advocates prefer.<\/p>\n<p>The plan has faced criticism for perhaps creating economic distortions, such as favoring certain sectors over others, and for its ample subsidies that may be redundant or counterproductive. Opponents also warn that the proposal\u2019s focus on targeted subsidies could backfire by inflating costs in health and housing markets.<\/p>\n<p>Paxton believes his approach will resonate with voters frustrated by inflation and housing affordability,emphasizing a desire for Texans to achieve the American Dream without financial hardship. Yet, critics remain skeptical about the plan&#8217;s feasibility and fiscal sustainability, questioning how the expected economic gains would offset the reduced tax revenue. the proposal signals a shift in some conservative policies, moving away from traditional broad-based tax reform towards targeted, populist measures.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<article class=\"fn-body\">\n<p class=\"wp-block-paragraph\">Supply-side economists are panning Texas Senate hopeful <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/ken-paxton\/\" data-type=\"post_tag\" data-id=\"4370\">Ken Paxton<\/a>\u2018s tax proposal, saying it cuts against the long-sought Republican goal of broadening the <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/taxes\/\" data-type=\"post_tag\" data-id=\"302\">tax<\/a> base while lowering overall rates.<\/p>\n<p class=\"wp-block-paragraph\">Paxton, the attorney general of Texas who is running against Democratic state Rep. <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/james-talarico\/\" data-type=\"post_tag\" data-id=\"17710\">James Talarico<\/a> in this year\u2019s election, <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/news\/campaigns\/congressional\/4670693\/paxton-trumpets-affordability-message-new-tax-proposal-senate-race-stalemate\/\">has released a plan<\/a> to grant tax breaks for housing, healthcare, and children, aimed at voters upset about the cost of living.<\/p>\n<section class=\"explore-more-section\" id=\"wex-recommended-widget\">\n<div class=\"magazine-container single\">\n<h1 class=\"magazine-title mt-2\">Recommended Stories<\/h1>\n<p>             <i class=\"fa-solid fa-play icon\"><\/i>         <\/div>\n<div class=\"explore-grid\">\n<div class=\"explore-card\">                         <a href=\"https:\/\/www.washingtonexaminer.com\/news\/campaigns\/congressional\/4676903\/subsidies-supply-siders-push-back-paxton-tax-plan\/?itm_source=parsely-api\">                             <\/p>\n<div class=\"explore-thumb-wrap\">                                                                                                                                  <\/div>\n<h3>\u2018Subsidies on top of subsidies\u2019: Supply-siders push back on Paxton tax plan<\/h3>\n<p>                         <\/a>                     <\/div>\n<div class=\"explore-card\">                         <a href=\"https:\/\/www.washingtonexaminer.com\/news\/campaigns\/congressional\/4678608\/republican-inflation-burrito-affordability-midterms\/?itm_source=parsely-api\">                             <\/p>\n<div class=\"explore-thumb-wrap\">                                                                                                                                  <\/div>\n<h3>Republican frustration over affordability vulnerability boils over<\/h3>\n<p>                         <\/a>                     <\/div>\n<div class=\"explore-card\">                         <a href=\"https:\/\/www.washingtonexaminer.com\/news\/white-house\/4675690\/anti-fraud-task-force-expand-agencies\/?itm_source=parsely-api\">                             <\/p>\n<div class=\"explore-thumb-wrap\">                                                                                                                                  <\/div>\n<h3>White House plans broader anti-fraud crackdown ahead of midterm elections<\/h3>\n<p>                         <\/a>                     <\/div>\n<\/p><\/div>\n<\/section>\n<p class=\"wp-block-paragraph\">As with the tax breaks that President Donald Trump campaigned on and enacted, such as cutting taxes on tips and Social Security, the proposals championed by Paxton have a populist bent but cut against the tax reform principles embraced by conservatives for decades.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-1\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-1\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-15\" data-wex-ad=\"art-dsk-inart-1\"><\/div>\n<\/div>\n<\/div>\n<div class=\"article-paywall\">\n<p class=\"wp-block-paragraph\"><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/magazine-special-section\/3454422\/supply-side-tax-populism-big-beautiful-bill-shift-gop\/\"><strong>SWAN SONG FOR SUPPLY-SIDERS? \u2018BIG, BEAUTIFUL BILL\u2019 SIGNALS SHIFT IN GOP<\/strong><\/a><\/p>\n<p class=\"wp-block-paragraph\">Conservative economists argue that the plan isn\u2019t sound and could increase prices in some cases, by increasing demand for certain goods and services without increasing supply. It would also complicate the tax code, rather than simplifying it. And it would not produce lower rates, which free-market economists see as helpful for increasing economic efficiency.<\/p>\n<p class=\"wp-block-paragraph\">\u201cWhat is being proposed here is a distinct departure from the traditional Republican tax reform agenda of broadening the base and lowering the rates,\u201d Adam Michel, director of tax policy studies at the libertarian Cato Institute, told the <em>Washington Examiner<\/em>.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-2\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-2\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-16\" data-wex-ad=\"art-dsk-inart-2\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">The Paxton campaign did not respond to a request for comment on the criticisms.<\/p>\n<p class=\"wp-block-paragraph\">Among the proposals in the Paxton plan, which the campaign <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.youtube.com\/watch?v=MO6n0-dK6r4\">has dubbed<\/a> the \u201cProtecting the Texas Promise Agenda,\u201d are a $25,000 deduction for out-of-pocket medical expenses and premiums, a $50,000 home down payment deduction, a $5,000 \u201chealthy living\u201d deduction, a 100% increase in the child tax credit, and making the Trump Accounts program permanent.<\/p>\n<p class=\"wp-block-paragraph\">Will McBride, vice president of federal tax policy at the Tax Foundation, said the plan is \u201cnot great.\u201d<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-3\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-3\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-17\" data-wex-ad=\"art-dsk-inart-3\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">\u201cIt goes in the opposite direction of tax reform, and it\u2019s the reason tax reform is needed,\u201d McBride told the <em>Washington Examiner<\/em>.<\/p>\n<p class=\"wp-block-paragraph\">McBride said tax reform, as it\u2019s commonly understood, entails removing special preferences and carve-outs that accumulate over decades and complicate the tax code.<\/p>\n<p class=\"wp-block-paragraph\">In 1986, President Ronald Reagan shepherded through landmark tax legislation with bipartisan support that simplified the tax code, closed loopholes, and was designed to make the system fairer. It gutted special tax deductions and lowered income and corporate taxes.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-4\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-4\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-25\" data-wex-ad=\"art-dsk-inart-4\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">Since then, broadening the tax base has been the North Star for Republican budgeteers. The idea is that special deductions and credits should be limited in the tax code so that there is a larger amount of income being taxed. That larger pool allows for overall rates to be lowered without reducing the revenues that fund the government.<\/p>\n<p class=\"wp-block-paragraph\">Broadening the base was top of mind for former House Speaker Paul Ryan, a budget hawk who helped enact the 2017 Tax Cuts and Jobs Act, better known as the Trump tax cuts. But since then, the Republican Party has shifted, at least with some policies, toward narrowing the base.<\/p>\n<p class=\"wp-block-paragraph\">For instance, many of the tax promises from the 2024 Trump presidential campaign \u2014 such as no taxes on tips, no taxes on overtime, and raising the cap on state and local tax deductions \u2014 cut in the other direction, away from broadening the base.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-5\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-5\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-26\" data-wex-ad=\"art-dsk-inart-5\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">Supply-side opponents of these provisions that only apply to certain subsets of taxpayers argue that they create distortions in the tax code. For example, cutting taxes on tips <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/policy\/economy\/3465912\/restaurants-boost-labor-competition-no-taxes-on-tips\/\">could give<\/a> full-service restaurants an advantage over fast-casual chains. Allowing more deductions for state and local taxes paid could incentivize mayors to spend more on government services.<\/p>\n<p class=\"wp-block-paragraph\">Preston Brashers, a research fellow at Advancing American Freedom\u2019s Plymouth Institute for Free Enterprise, said the proposal is \u201ctaking the wrong approach.\u201d<\/p>\n<p class=\"wp-block-paragraph\">\u201cI think ultimately it reveals a misunderstanding of what tax policy is supposed to be about, about how the economy works,\u201d Brashers told the <em>Washington Examiner<\/em>.<\/p>\n<p class=\"wp-block-paragraph\">Still, Paxton is betting that the plan will resonate with voters who are fed up with high inflation and with homeownership being out of reach.<\/p>\n<p class=\"wp-block-paragraph\">\u201cWashington has made it harder than ever to get ahead, and the American dream is slipping away as the cost of everything from housing to healthcare rises,\u201d Paxton said in an ad released by the campaign about the plan.<\/p>\n<p class=\"wp-block-paragraph\">\u201cMy agenda is very simple: I believe every Texan should be able to buy a home, raise a family, and live a healthy life without struggling to make ends meet,\u201d the GOP Senate hopeful added.<\/p>\n<h2 id=\"h-subsidies-on-top-of-subsidies\" class=\"wp-block-heading\">\u2018Subsidies on top of subsidies\u2019<\/h2>\n<p class=\"wp-block-paragraph\">Paxton\u2019s plan has a $5,000 tax deduction for \u201chealthy lifestyle\u201d expenses, including gym expenses and costs associated with GLP-1 drugs like Ozempic.<\/p>\n<p class=\"wp-block-paragraph\">Another major item is a $25,000 tax deduction for out-of-pocket medical expenses, which includes an additional $25,000 deduction for dependents.<\/p>\n<p class=\"wp-block-paragraph\">But McBride said a lot of those health costs are already deductible. He said that essentially all of those premiums are already exempt from both income and payroll taxes, referring to the exclusion of employer-sponsored health insurance from taxable income.<\/p>\n<p class=\"wp-block-paragraph\">\u201cSo you know this is piling on subsidies on top of subsidies \u2026 it\u2019s like trying to put out a fire by setting the place on fire again,\u201d he added.<\/p>\n<p class=\"wp-block-paragraph\">Joshua Rowley, a researcher at the libertarian Mercatus Center at George Mason University, told the <em>Washington Examiner<\/em> that Paxton is correct in that Washington is making it harder for people to get ahead. Still, he said the attorney general\u2019s plan could backfire by making things more expensive.<\/p>\n<p class=\"wp-block-paragraph\">Rowley said that the demand-side subsidies would increase demand for health insurance and health expenses, as well as increase demand for homeownership.<\/p>\n<p class=\"wp-block-paragraph\">\u201cAnd that\u2019s going to push up those prices rather than moderate those prices, which is what Americans want to see,\u201d he said.<\/p>\n<h2 id=\"h-costs-to-the-treasury\" class=\"wp-block-heading\">Costs to the Treasury<\/h2>\n<p class=\"wp-block-paragraph\">There is also the question of how the tax cuts would be paid for.<\/p>\n<p class=\"wp-block-paragraph\">Paxton hinted to reporters that he thinks the lower taxes would return to the Treasury through more spending by consumers, according to the <em>Dallas Morning News<\/em>.<\/p>\n<p class=\"wp-block-paragraph\">\u201cI never believe that tax cuts necessarily mean you have less money in the Treasury, because often if people are able to keep more of their money, they spend it, and it runs through the economy,\u201d he <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.dallasnews.com\/news\/politics\/article\/paxton-s-economic-pitch-combines-family-tax-22371769.php\">told<\/a> reporters in Allen, Texas.<\/p>\n<p class=\"wp-block-paragraph\">Rowley said while it is correct that when taxes are cut, people use those tax dollars somewhere else, the Paxton proposals wouldn\u2019t do so to the extent of increasing revenues.<\/p>\n<p class=\"wp-block-paragraph\">\u201cAs people who focus on tax policy would say, they\u2019re not pro-growth. These aren\u2019t things that are going to expand the size of the economy, especially relative to the revenue loss,\u201d he said.<\/p>\n<p class=\"wp-block-paragraph\">Paxton\u2019s plan would double the child tax credit, which would mean increasing the maximum credit to $4,400 per child. Some populist Republicans have supported a bigger child tax credit in recent years.<\/p>\n<p class=\"wp-block-paragraph\">\u201cWe want to make it easier for you to take care of your children,\u201d Paxton told voters at a campaign stop this week.<\/p>\n<p class=\"wp-block-paragraph\">McBride said the political path for Paxton\u2019s tax proposals to become law is unclear, but that you can \u201cnever say never\u201d in politics. He noted that many of the campaign trail tax proposals that Trump ran on in 2024 did, in fact, become law.<\/p>\n<p class=\"wp-block-paragraph\"><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/news\/4670031\/top-republican-housing-priorities-major-bipartisan-bill\/\"><strong>TOP REPUBLICAN OUTLINES HOUSING PRIORITIES AFTER MAJOR BIPARTISAN BILL<\/strong><\/a><\/p>\n<p class=\"wp-block-paragraph\">\u201cThe affordability problem is real, but the impulse for more free stuff is going to make that problem worse in the end,\u201d McBride said.<\/p>\n<p class=\"wp-block-paragraph\">Paxton is touting his economic agenda this week, which included stops in Allen on Aug. 4, Houston on Aug. 5, and McAllen on Aug. 6. He will also visit San Antonio on Aug. 8.<\/p>\n<\/div>\n<\/article>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supply-side critics oppose Paxton\u2019s Texas tax plan<\/p>\n","protected":false},"author":3360,"featured_media":2641707,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2026\/08\/ken-paxton-economic-plan-trashed.jpg?w=696","fifu_image_alt":"","footnotes":""},"categories":[33651],"tags":[83818,38341,37104],"class_list":["post-2641706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-western-journal","tag-supply-side-economics","tag-tax-policy","tag-texas-politics"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2026\/08\/ken-paxton-economic-plan-trashed.jpg?w=696","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2641706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/3360"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2641706"}],"version-history":[{"count":2,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2641706\/revisions"}],"predecessor-version":[{"id":2641709,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2641706\/revisions\/2641709"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2641707"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2641706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2641706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2641706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}