The Biden-Harris administration has become synonymous with an economy in tatters. Americans are struggling with rising prices, stagnant wages, and increased obstacles to starting a business, buying a home or retiring. According to the Gallup Economic Confidence Index, Americans’ outlook on the economy from 2021 to 2024 has been negative.
Contrast this with the economic prosperity seen under the Trump administration. America enjoyed energy abundance, skyrocketing wages, a record number of startups and incredible stock market averages. A large part of this success can be credited to the 2017 Tax Cuts and Jobs Act (TCJA), a tax cut for families and small businesses that fueled one of the strongest economies in decades.
But now, many provisions of the legislation are set to expire next year. Congress must act to extend the tax cuts and reverse the Biden-Harris administration’s economic stagnation.
Trump’s tax cuts made an immediate, positive impact on the lives of average Americans — benefiting millions, especially families with children and small business owners. The legislation cut 80% of Americans’ individual income tax rates and nearly doubled the standard deduction, allowing more families to keep what they earn. As the real median household income increased by $5,000 and real wages rose by 4.9%, a majority of Americans found themselves with more take-home income to budget for necessities.
Provisions like capital expensing and income-tax cuts sparked growth-oriented investments for small businesses. When I served as head of the Small Business Administration, I traveled to all 50 states and heard repeatedly from business owners who put their tax savings right back into growing their businesses.
Family-run businesses from North Carolina to Pennsylvania cited the Trump tax cuts as the reason they could afford employee bonuses or new equipment. Recently, 500 Chambers of Commerce called for the tax cuts to be extended.
Naysayers have tried to claim that the tax cuts only benefited the top 1%, but this is demonstrably false. The Tax Foundation notes that in the first year after the passage of the TCJA, the top 1% of taxpayers’ share of taxes did not decrease but rather rose 1.6 percentage points to 40.1%. The latest analysis (tax year 2020) shows it is now even higher, up to 42.3%.
The richest paid more taxes under TCJA, which is not what the radical Left wants you to hear.
When President Ronald Reagan’s 1981 and 1986 tax reforms lightened the income and corporate tax burden on wage earners and job creators, the economy took off. Average Americans saw inflation fall from 13.5% to 4.1%, unemployment fall from 7.6% to 5.5% and the prime interest rate fall by 10.5 percentage points — a historic recovery during the eight years of his presidency.
Like Reaganomics, President Donald Trump’s 2017 tax cuts operated on a simple economic principle: When Main Street businesses are taxed less, they can reinvest that money into their workforce by offering higher wages, better benefits, and more job opportunities. When average American workers benefit from lower taxes and higher take-home pay, families can afford more spending and sustain long-term financial planning. This is the virtuous cycle that both Reaganomics and the Trump tax cuts created — and that the Biden-Harris administration has stifled through inflationary, job-killing policies.
The Federal Reserve’s recent rate cut just before a national election is a worrying bellwether for the Biden-Harris economy’s precipitous decline. With no clear plan for replacing the expiring tax cuts, struggling American families could ultimately face thousands more dollars in income tax liability.
Small business owners, meanwhile, may have to choose between downsizing and closing up shop under a double-digit tax hike.
Congress has a duty to not only extend the tax cuts before they expire but also to build on them by undoing some of the Biden-Harris administration’s ideologically-motivated corporate tax credits, as House Speaker Mike Johnson recently recommended at an America First Policy Institute event. The bottom line is that Bidenomics has failed.
Vice President Kamala Harris has tried to repackage it as “opportunity economics,” but it is the same disastrous policy.
Over the last eight years, Americans who have enjoyed a simplified tax filing and more dollars in their paychecks must now wait and hope these benefits are not taken away in 2025. The evidence could not be clearer: The 2017 tax cuts empowered both small businesses and working families by unburdening them from excessive taxation and giving them the resources to build a strong economy.
Keeping them in place and building on their success will be a lifeline for the vast majority of Americans.
Linda McMahon is the Chair of the America First Policy Institute and its Center for the American Worker. She is also the former Administrator of the Small Business Administration and the Chairman of the Daily Caller News Foundation’s Advisory Council.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
(Featured Image Media Credit: Screen Capture/Bloomberg Television)
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
