WASHINGTON —The GOP chairman of a powerful tax-writing committee says he is determined to push forward with “phase two” of tax reform, despite rising budget deficits and the initial unpopularity of recent tax cuts.
In a Wednesday keynote at the Heritage Foundation, Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Committee, said the new tax cuts are already boosting the economy and will increase federal revenues in the long term.
“Wages are up, unemployment is low, jobless claims drop to its lowest level since 1973,” said Brady.
The chairman also laid out future proposals to overhaul the tax code, telling the audience of several dozen people that “tax reform 2.0 is really about tax reform and improvements every year.”
But prospects for further tax reform in an election year are unclear.
The non-partisan Congressional Budget Office estimated the tax cuts, which began to take effect in January, will add more than $1.8 trillion to the national debt over the next decade, with a slight decrease in the annual deficit beginning in 2027.
And polls show the tax law is unpopular.
A recent Wall Street Journal/NBC survey showed only 27 percent of Americans view the GOP tax law as a “good idea.”
“The economic argument is false, but the political danger is real,” Josh Bivens, research director at the Democratic-leaning Economic Policy Institute, argued in an interview.
EPI sponsored 100 marches across the country for Tax Day this year to call attention to its view that rising deficits caused by the tax cuts will inevitably hurt social service programs such as Social Security, Medicare, Medicaid and the Affordable Care Act.
Bivens also said the Trump tax cuts will benefit mostly richer Americans.
The law temporarily cuts the tax rate individuals have to pay and a pass-through provision allows an individual taxpayer to deduct 20 percent of qualified business income.
But instead of yielding to criticism, some tax reform advocates such as Douglas Holtz-Eakin, president of America Action Forum, an advocacy group with close ties to House GOP leadership, urge the Republican Party to go even further.
Holtz-Eakin wants the GOP-controlled Congress to make the individual tax cuts permanent, describing the certainty that would create as “the best tax policy.”
“Let’s keep doing tax reform. There is nothing better,” said Holtz-Eakin at the Heritage event.