Elon Musk's Department of Government Efficiency a much better means of offsetting tax cuts than economy-killing tariffs
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Scholars will be scrutinizing the 2024 U.S. election for years to come, but a driving factor behind the re-election of Donald Trump and Republican victories in the House and Senate was undoubtedly voter dissatisfaction with the economy and the impact of inflation on the affordability of day-to-day life.
Once-and-future president Trump has made a host of promises to address such concerns. But while extending tax cuts will almost certainly win him fans, tariffs are more likely to burden the economy and increase the cost of living.
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When one swing state after another turned Republican red on Nov. 5, Annie Lowrey noted in The Atlantic that “Donald Trump is heading back to the White House. He has inflation to thank.”
Americans repeatedly told pollsters the economy and inflation were at or near the top of their concerns. Two years after U.S. inflation peaked at 9.1 per cent in June 2022, the issue stayed front and centre for the public. In mid-October, 69 per cent of those surveyed told Ipsos that, “The next president should focus on the cost of living.”
Allowing people to keep more of the money they earn is certainly one way to make bills easier to pay. That means an extension of the provisions of the Tax Cuts and Jobs Act, which was passed in 2017 during Trump’s first term, is close to a sure thing. Many of the personal and business tax cuts in that law expire next year, so keeping them in place will be an early item on the incoming congressional to-do list.
But extending........