The Tax Cuts and Jobs Act of 2017 is the principal legislative achievement that Republicans in the nation’s capital have made during the past 15 years. There is not a lot of competition for the title. It’s still remarkable how little thought and attention Republicans are giving to its defense.
Since then, and especially during the past two years, inflation has eaten away the entire increase: $2,000 today buys what $1,600 did in 2017. To get back to full strength, the credit would have to be set at $2,500 today. But Republicans aren’t proposing that, or calling for the credit to be indexed to inflation so it stops eroding, or even lashing President Biden for what amounts to a tax increase on middle-class parents. They’re not trying to set up the 2024 election as, at least in part, a debate on whether to keep taxes at their low post-Trump level or let them rise.
Instead, they are offering a new proposal, the Tax Cuts for Working Families Act. It takes the standard deduction, which the Tax Cuts and Jobs Act increased, and increases it some more for the next two years. It would provide a little tax relief to nearly everyone who files income taxes. There are, contrary to the title of the bill, no particular benefits for families, and the bill even includes a marriage penalty. Under the proposal, two working people would pay more in taxes if they got married, at least if they have kids.
Republican sponsors say giving everyone a little tax relief through a larger standard deduction would soften the blow of inflation. The talking point does not really add up. The standard deduction already has an automatic inflation adjustment built in. The new bill would provide tax cuts in 2024 and 2025. By then, if present trends persist, the worst inflation will be behind us.