ChrisWeigant.com

Tax Cut? What Tax Cut?

[ Posted Thursday, May 8th, 2025 – 14:54 UTC ]

Republicans in Congress are at the "rubber meets the road" phase of constructing their new budget, where they have to put actual numbers down on paper and add them all up. The next few weeks are going to be a dizzying frenzy of dealmaking and adjustments, as differing priorities are weighed against each other. But at the heart of their plans is a big "tax cut." I put that in scare quotes because the American taxpaying public is probably not going to see it in quite the same way as the Republicans do. The public, in fact, is going to be left wondering: "Tax cut? What tax cut? I don't see a tax cut anywhere!" Which could make the whole thing a hard sell, politically.

There may be some tax changes included which are new -- in particular the three I discussed last week (changing the way tips, Social Security payments, and overtime pay are taxed). But what I'm talking about here today is the main tax proposal from the Republicans. All the other changes are going to be small potatoes compared to extending the tax cuts that were passed during Donald Trump's first term. But please note that language: extending the tax cuts -- not creating new ones.

Due to budgetary rules and political pressure, few things are added to the federal budget in a permanent way. Most of them are added for either the next decade or for a smaller portion of that next decade. They have a "sunset" built into them, when they turn back into a pumpkin. The first Trump tax cuts will sunset this year -- if Congress does nothing, then everyone's taxes will go up next year. Few people are aware of this, though.

With Republicans back in charge of Congress and the White House, they are eager to extend these tax cuts further out into the future. Doing so will add between $4 and $5 trillion to the deficit, over 10 years. But Republicans aren't likely to get much public goodwill or credit for doing so, because if they are completely successful than the net result is going to be that nobody's taxes will change at all. There will be no "new tax cut," instead the old tax cut will merely be extended. The status quo will remain exactly the same.

This is where public perception could become a major problem for Republicans. They're going to have a big intraparty fight, struggle to put together a giant bill, and at the end of the day if they are successful, then nothing will change for people filling out their tax forms. Their taxes next year are going to be exactly the same as their taxes this year. Which is not going to get people very excited, to put it mildly.

Republicans will be left with the political sales job of: "Without our new budget, your taxes would have gone way up -- but now you'll pay exactly the same thing as you did last year!" Obviously, this is a lot tougher sell than, say: "We just lowered everyone's tax rates!" This is why I used the scare quotes on "tax cut" in that first paragraph. Republicans will be out there bragging about their gigantic "tax cut," but when any individual taxpayer goes looking for this "tax cut" they're not going to find it. Instead, they're going to find that nothing has changed for them at all.

When these tax cuts were initially passed in Trump's first term, they were the most unpopular tax cuts in history. There was no big political payoff for the Republicans, as most people (quite correctly) saw that the lion's share of the tax cuts went to the very, very wealthy, while average taxpayers got the equivalent of peanuts. So it's not like there was a groundswell of goodwill that came out of the initial passage that Republicans could look forward to riding when extending them.

Instead, Republicans are going to be stuck with: "What if they passed a tax cut and nobody noticed?" There may even be some disappointment and resentment when people do get around to filling out next year's taxes and realize that nothing has changed. "Where's that tax cut the Republicans promised me?" could be the widespread feeling, rather than thanks or gratitude.

Democrats are already pointing out that Republicans are putting together this continuation of a big payoff for the ultra-wealthy while at the same time gutting basic government services in a major way. With tens of thousands of federal workers laid off, it's going to be harder and harder for average people to interact with any government services in the future. Just today, the head of FEMA was given the boot because he had the temerity to say that he didn't think completely getting rid of FEMA was a good idea. Trump and his minions want to eliminate the program -- and in three weeks, hurricane season will begin. When the inevitable big storm comes and devastates a swath of coastline, people will expect FEMA to show up but they won't be there at all. And that's just one example.

Perhaps if the Republicans were instituting radical changes to the tax code which did indeed give millions of people an actual break on their taxes, all this austerity might be seen as a tradeoff. Trump keeps talking about how he's going to get so much money from his tariffs that he could just exempt everyone making $200,000 a year or less from paying income taxes. That would indeed be a major change that people would definitely notice -- but it's not going to be included in the budget Republicans are currently working on.

Instead, what people are going to get is the continuation of the status quo, in exchange for federal services being gutted left and right. Which is not much of a tradeoff, to the average taxpayer.

As mentioned, the next few weeks are going to be full of drama as differing factions of Republicans fight hard for their different agenda items. Whatever emerges will probably not be exactly the same as the first Trump tax cuts, as things get tweaked at the edges. But these changes will all be fairly minor, in the grand scheme of things. The main portion of the tax cuts will indeed remain the same -- or similar enough that it'll be hard to see the difference.

Which means that nobody's going to notice. Which is going to make it extremely difficult for Republicans to use it as a big talking point out on the campaign trail. They won't be met with gratitude, instead they'll be met with disbelief: "Tax cut? What tax cut?"

-- Chris Weigant

 

Follow Chris on Twitter: @ChrisWeigant

 

4 Comments on “Tax Cut? What Tax Cut?”

  1. [1] 
    nypoet22 wrote:

    why wouldn't Donald and his people claim that the extension of tax cuts for billionaires is in fact a brand new, massive tax cut that will bring back jobs and make everyone's lives beautiful?

    just because it happens not to actually be the case? pshaw! that's just fake news requiring alternative facts.

  2. [2] 
    John From Censornati wrote:

    "Where's that tax cut the Republicans promised me?" could be the widespread feeling, rather than thanks or gratitude.

    Ungrateful bastards. I mean, were they not watching the performance art of the deal today? Fat Donny's big beautiful UK deal will still include the 10% Trump Tax. He keeps his promises when he feels like it.

  3. [3] 
    John From Censornati wrote:

    When I see that, that means we lose less money. Look, China was making over a trillion, $1.1 trillion, in my opinion. You know, different numbers from $500 billion to a trillion or a trillion, I think it was 1.1 trillion. And frankly, if we didn’t do business, we would have been better off. Okay, you understand that? So when you say it’s slowed down, that’s a good thing, not a bad thing. - Fat Donny displaying dementia at levels nobody has ever seen before when asked about dockworkers and truckers losing their jobs. We've never seen anything like it. Nobody ever mentions it.

  4. [4] 
    John From Censornati wrote:

    If you lose your job, you don't have to pay income taxes, so you don't need a tax cut. That's a good thing, not a bad thing.

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