President-elect Trump’s election win is setting up a fight among Republicans over cutting taxes and reining in the deficit as the party inches toward control of both chambers of Congress.
Republicans are on track to kick off the second Trump administration with majorities in both chambers, giving the GOP a chance to pass a major tax policy bill along party lines.
Trump and many top Republicans are eager to extend his 2017 cut law, which could cost $4.6 trillion, according to a projection by the Congressional Budget Office (CBO).
The president-elect also proposed a host of specific tax cuts, such as getting rid of taxes on tips, overtime, and Social Security; creating deductions for auto loan interest payments; and even getting rid of income taxes, which could cost as much as $15.5 trillion, according to the Committee for a Responsible Federal Budget (CRFB), a deficit watchdog group.
Now Republicans are jockeying for position in how far they want to go with additional tax cuts after national debt levels ratcheted up to a new plateau of around 120 percent of gross domestic product following the pandemic.
“If you have a Republican sweep, they’re going to very quickly agree that $3.5 trillion of deficit-financed tax relief is the way to go … but I don’t think it’s going to be quick,” Todd Metcalf, tax policy principal at PwC, said in an interview. “There’s been a lot of complaining about debts and deficits, and all of........