December 22, 2022

Smith on Five-Year Anniversary of Tax Cuts and Jobs Act: Republican Tax Relief Delivered for American Families

WASHINGTON, D.C. – House Budget Committee Republican Leader Jason Smith (MO-08) released the following statement to mark the five-year anniversary of President Trump signing into law the Tax Cuts and Jobs Act (TCJA):

“Thanks to Republican efforts and President Trump’s leadership, the Tax Cuts and Jobs Act kept its promise to build a stronger, more prosperous nation where families and workers can chase the American Dream. The law was a huge win in particular for the working class: it delivered lower taxes, bigger paychecks, more jobs, and more investment here in America. Low- and middle-income families of four have saved at least $2,000 on their tax bill each year for five years, which has provided some breathing room as they have lost nearly two months’ worth of pay to President Biden’s inflation crisis.

“In fact, it is the working class who have made the biggest gains under the Tax Cuts and Jobs Act. Not only did working families get to keep more of their paycheck, but their paychecks grew the fastest compared to every other income group. America saw the lowest unemployment rate in 50 years because businesses had incentives to expand and bring production back to the United States. A year after passage of this historic tax relief, our economy grew at a full percentage point higher than the Congressional Budget Office had projected it would for that year. It is clear that the Tax Cuts and Jobs Act has made a real difference in the lives of hardworking Americans.

“TCJA reduced the tax burden on families and businesses, while managing to bring in historic revenues to federal coffers. Tax revenues reached an all-time high of $4.9 trillion for fiscal year 2022, $900 billion higher than the Congressional Budget Office projected for 2022 when TCJA was signed into law and $1.6 trillion higher than before TCJA passed. These results show that Washington does not have a revenue problem and the path to fiscal sanity is through drastically curbing wasteful spending, not the Democrat strategy of hiring 87,000 IRS agents to target more families, raising taxes on the middle-class, and spending trillions.

“By extending key provisions, the Tax Cuts and Jobs Act can continue to be the foundation for a prosperous economy. Instead of dismantling the Child Tax Credit, as Democrats have proposed, we must instead promote the benefit of work to families with sensible work requirements for able-bodied adults. Full expensing is critical for businesses to hire new workers at decent wages. Doubling the exemption from the Death Tax will help preserve family farming, secure America’s food supply, and bring us one step closer towards full repeal. Keeping in place critical incentives for research and development will ensure the United States remains competitive and leads the world in innovation.

“TCJA was a down payment on a commitment Republicans have consistently made to put the interests of the working class first. Still, more needs to be done. The pandemic exposed that America is too reliant on hostile countries like China for critical items like medical supplies. Washington Democrats are killing domestic fossil fuel production and raising gas prices. In the days ahead, the work of Congress and particularly the House Ways and Means Committee, must be to build a stronger economy on the successful foundation laid by the TCJA, including examining how the tax code can be further improved to re-shore and strengthen supply chains, produce more energy in America, increase advanced manufacturing, and provide even greater financial security for the American people.”

- House Budget Committee Republican Leader Smith

TCJA Revenues Thanks to the Republican-passed Tax Cuts & Jobs Act, revenues reached the highest level in history.

  • $4.9 trillion in total revenues this year, the highest in recorded history
    • $900 billion more than CBO projected for FY 2022 when TCJA passed
    • $1.6 trillion more than the pre-TCJA revenue levels
    • 20% of GDP, tied for the highest level in 77 years
  • Revenues are up 21% compared to last year

Democrats' Spending Agenda It’s clear Washington Democrats have a spending problem, not a revenue problem. Under one-party Democrat rule, spending has increased by over $10 trillion, including:

  • $2.5 trillion increase in interest payments on the growing federal debt
  • $1.9 trillion American Rescue Plan Act
  • $745 billion Inflation Reduction Act
  • $1+ trillion on Biden’s Executive Actions
  • $625 billion Infrastructure Investment & Jobs Act

Consequences of Democrat Spending The highest spike in prices coupled with the fastest increase in interest rates in 40 years.

  • Inflation is at a forty-year high of 7.1 percent.
  • Inflation has increased 14.3 percent since President Biden took office.
  • Real wages have decreased 3.8 percent since President Biden took office.
  • To combat the President’s inflation crisis, the Federal Reserve raised interest rates this month, the seventh rate increase since March.
  • In total, the federal funds rate has risen by 4.25 percent, the fastest rate hike in 40 years and larger than the last 15 years combined.
    • When President Biden took office, the Congressional Budget Office predicted interest rates would not increase until 2024.
  • Interest payments on the federal debt reached $103 billion over the months of October and November – an 87 percent increase over the same period last year.