Cruz Pushes to Make the Tax Cuts Permanent

Republicans are looking to make the tax cuts from the Tax Cuts and Jobs Act President Donald Trump signed into law Dec. 22 permanent.

“We’ve been able to deliver on a number of our most important promises to the voters. None is more important than the victory of tax reform,” Sen. Ted Cruz, R-Texas, said April 12 at a press conference held by Americans for Tax Reform, a nonprofit that opposes all tax increases.

The income tax cuts aren’t currently permanent and the tax cuts are set to expire in 2025 if legislation isn’t passed.

Cruz drafted a bill that would make the tax cuts permanent, an idea he says is supported by Sen. Bernie Sanders, I-Vt.

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“The weeks after the tax bill passed, Bernie Sanders was on one of the Sunday shows. [CNN’s] Jake Tapper asked him, said, ‘Listen, virtually every middle-class taxpayer in America is getting a tax cut as a result of this. Isn’t this a good thing?’ Bernie said, ‘Yes, yes, it’s a wonderful thing. But the problem is, it isn’t permanent.’ Well, I saw that and promptly tweeted out a reply.”

Cruz asked Sanders to work with him to “make the middle-class tax cuts permanent. Join me, we’ll co-sponsor legislation.” Cruz said that Sanders has not responded.

“We ought to follow through to make the individual tax cuts permanent. We ought to follow through to make expensing permanent. We ought to follow through to make the small business tax cuts permanent. We ought to keep moving forward and prioritizing jobs, jobs, jobs because that’s the priority of the American people,” Cruz said.

Alongside Cruz, Americans for Tax Reform is urging Treasury Secretary Steven Mnuchin to modify a tax provision, saying it “will increase the wealth of Americans across the country.”

“President Trump and Congress passed a bold, pro-growth tax reform bill late last year,”  Grover Norquist, president of Americans for Tax Reform, wrote in an April 12 letter addressed to Mnuchin. “However, because of legislative constraints, the bill could not contain every tax cut that Republicans have campaigned on.”

Norquist added: “The next step should be Treasury delivering a significant tax cut by using its regulatory authority to add an inflation adjustment to the calculation of capital gains taxes.”

Norquist put a hypothetical example in his letter:

“An investor [who] makes a capital investment of $1,000 in 2000 and sells that investment for $2,000 in 2017 will be taxed for a $1,000 gain at a top capital gains tax rate of 23.8 percent. After adjusting for inflation, the ‘true gain’ is much lower—just $579.”

“Any time you can lower the effective tax rate on savings and investment, you should. Indexing capital gains to inflation is one of those things that just makes intuitive sense,” said The Heritage Foundation’s Adam Michel, a tax policy analyst. “The government shouldn’t be taxing you on phantom gains from inflation.”

This article is republished with permission from our friends at The Daily Signal.