When Trump increased taxes via tariffs many screamed that it was the largest in history, but now some want to revert back to the old rates. When Trump began slashing the government under DOGE, many of the same people said he was cutting too much, too fast, only to insist the real problem is that he isn’t cutting enough. Why would anyone trust them now?
Last week, Speaker of the House Mike Johnson did what the conventional wisdom said he’d never do: Unite the moderate and conservative wings of his fractured caucus to pass a single bill that enacts the major portions of President Donald Trump’s Make America Great Again Agenda, albeit with an incredibly narrow 215-214 margin. Practically up until the vote itself, the establishment media was convinced Speaker Johnson was either weak or incredibly weak, suffering humiliating loss after humiliating loss. In January 2024, he was considered so out of his depth that Time Magazine claimed he was at risk of becoming a “SINO, Speaker in Name Only.” As they put it at the time, “When a political leader’s explicit limits become so obvious that it’s all anyone can talk about, their strength begins diminishing with a quick-collapsing half-life. It’s the kind of situation you might expect of a Speaker who is clearly past their prime. Johnson hasn’t even reached 100 days at the job…Judging from the defections, detractors, and open defiance coming from his own nominal allies, Johnson’s grip on the gavel may be far weaker than his predecessor; Kevin McCarthy lasted a grand 269 days, the third-shortest in history. Johnson just hit 90 days in so-called power, and already is staring down a mutiny from his right flank on a collection of complaints as varied as allowing any funding for Ukraine, not pushing hard enough on border security, and even his willingness to work with Democrats to keep the government open while everyone tries to work out a more durable spending deal.” “There’s few things worse in D.C. than being perceived as weak, but perceived weakness can often be tougher to shake. Put plainly: Johnson’s prospects for success may now be less promising than those that McCarthy enjoyed in a job he long sought and quickly lost,” they concluded. As recently as last month, Speaker Johnson was assailed again, when he was unable to stop an obscure proposal that would allow members who had recently given birth to designate a colleague to vote on their behalf. According to MSNBC’s Zasheen Aleem, “House Speaker Mike Johnson suffered a humiliating blow from his own caucus on Tuesday when he failed to kill a proposal that would have allowed lawmakers who have just given birth to delegate a colleague to cast votes on their behalf. Johnson, a Louisiana Republican, was so put off by his tactical loss that he sent everyone in Congress home early for the week. The bizarre decision to tell all of his colleagues to pack it in was a rather obvious attempt to divert attention from his failure to control the chamber…The outcome is embarrassing for Johnson, who used a strong-arm tactic to try to quell a mutiny over a relatively low-stakes issue, and then failed. Johnson was immediately pouty: As he left the chamber he told reporters, ‘That rule being brought down means that we can’t have any further action on the floor this week.’”
As late as Monday last week, CNN was doubtful about his prospects and the overall prospects of the bill, noting “As the problems pile up for Johnson, Trump plans to make his pitch to Republicans at a meeting at the US Capitol on Tuesday, according to four people familiar with the plans. It will be the first time the president will speak in person with the full group of House Republicans since the conference began drafting his agenda – coming at a critical time for Johnson as he attempts to pass the bill this week despite a sizable number of ‘no’ votes as of Monday night.” Somehow, this had all changed by Wednesday, when barely forty eight hours later the Big Beautiful Bill, as President Trump prefers to call it passed – only to have the usual media suspects and motley collection of Trump-detractors to declare it dead in the Senate, as if they didn’t just do so in the House and as if they hadn’t done the same earlier this year on the debt ceiling and the budget. By Friday, The Huffington Post was claiming, “Senate Republicans Won’t Accept House Tax And Spending Cut Bill,” but before we consider the bill’s ultimate fate, what’s actually in it?
While many are describing it in terms of spending and acting as though it is a budget, that’s not the primary focus at least partially due to the rules of the Senate for reconciliation, which can pass a bill with a mere majority rather than 60 votes. As White House Deputy Chief of Staff Stephen Miller explained, “A reconciliation bill, which is a budget bill that passes with 50 votes, is limited by senate rules to ‘mandatory’ spending only — eg Medicaid and Food Stamps,” he wrote on X. “The senate rules prevent it from cutting ‘discretionary’ spending — eg the Department of Education or federal grants. The DOGE cuts are overwhelmingly discretionary, not mandatory. The bill saves more than 1.6 TRILLION in mandatory spending, including the largest-ever welfare reform. A remarkable achievement.” This means it is largely a tax bill, which most importantly in my opinion, makes permanent President Trump’s 2017 tax reform package, known as the Tax Cuts and Jobs Act, that lowered rates across the board, including a much needed reduction in corporate taxes and streamlined filing for a significant percentage of households, who now take advantage of a single large deduction rather than having to itemize each and every one. In addition, the bill delivers on two key campaign promises, no taxes on tips and no taxes on overtime, while quadrupling the state and local tax deduction to reduce the burden on residents of primarily Democrat states, who frequently pay far more in property taxes than the current $10,000 offset. Also on taxes, there is an up to $10,000 deduction on interest for auto loans on US made cars and trucks, the elimination of a $200 tax on gun silencers, a $500 increase in the child tax credit, and a new tax of 3.5% on money stent abroad by non-US citizens, known as remittances. Otherwise, a brand new program, known as Trump Accounts, provides a one time $1,000 payment into a savings account for children born between 2024 and 2028; parents can tribute $5,000 per year as well, to be used for higher education, job training, or the purchase of a first home after the child turns 18. At least some of these tax cuts are offset by tightening work-requirement rules for Medicare and Food Stamps, which is expected to save almost $1 trillion over ten years, and reductions in green-energy tax credits began under President Joe Biden, adding another $500 billion or so. There are, however, two increases in spending, a $150 billion one time increase for defense and $46.5 billion for border security, neither of which strike me as particularly necessary considering what we are spending on defense as it is and what President Trump has achieved at the border already, but both were campaign promises, made and now at least attempting to be kept.
Perhaps needless to say, the continuation of the tax cuts and the additional tax cuts are expected to increase the deficit by about $2.8 trillion according to various projections and the bill raises the debt ceiling by about $4 trillion to compensate, much to the disappointment of many so called fiscal hawks, more on that in a moment. Equally needless to say, the media is already busy citing “multiple assessments” that “Low-income Americans will feel the effect of changes to aid programs, while the wealthy will see most of the windfall from tax cuts” as CNN described it. Though even they admit that more than 80% of Americans would see their taxes decline, with the average family netting an additional $2,900 per year, CNN and their army of real card-carrying experts reach the conclusion that the wealthy will benefit the most by recycling the very same arguments used against the original 2017 tax cuts. Indeed, they base their numbers – “Those in the top 20% would see an average tax cut of $12,660 next year, increasing their after-tax income by 3.4%” and “Middle-income earners, those making between about $67,000 and $119,000, would get a tax break of $1,840, bumping up their after-tax income by 2.4%, while those in the lowest bracket, who earn less than about $35,000, would get a tax cut of $160, nudging up their after-tax income by 0.8%” – by bizarrely reverting to the pre-2017 rates, which while mandated by law in 2026, no one believed was ever going to happen even under a potential Democrat administration rather than the current one. Mr. Miller described this phenomenon, “This lie is based on a CBO accounting gimmick. Income tax rates from the 2017 tax cut are set to expire in September. They were always planned to be permanent. CBO says maintaining *current* rates adds to the deficit, but by definition leaving these income tax rates unchanged cannot add one penny to the deficit. The bill’s spending cuts REDUCE the deficit against the current law baseline, which is the only correct baseline to use.” On top of that, CNN bizarrely chose numbers that do not include the provisions for no taxes and tips and overtime, which would undoubtedly be a windfall for lower income workers. This, they blithely describe as, “Individual circumstances will also play a major role, since the tax package provides targeted breaks for certain groups. For instance, because of the temporary elimination of taxes on tips and overtime, those who receive those types of compensation could see more tax relief than other workers making the same income.” Of course, a rational, reasoned analysis isn’t CNN or the media in generals actual goal. If it was, experts also would take into account the reality that extrapolating supposed deficits because of tax cuts doesn’t have a particularly good track record. Thus, despite supposedly massive cuts biased towards the rich in 2017 that would add trillions to the deficit, actual dollars to the treasury increased rather than fell, substantially. Rising from $3.32 trillion in 2017 to $4.44 trillion in 2023, almost 34% while the government spending rose almost 55%, from $3.98 trillion to $6.16 trillion, greatly outpacing a 40% increase in GDP during that period, meaning the real driver of debt, to the extent that anyone is really concerned about, remains spending rather than taxing. Fortunately, Senate Republicans, while not yet fully endorsing the plan, are proposing to calculate future deficits based on the current tax rates, not raising them only to reduce them, leaving the primary negotiating point to be some $500 billion in additional spending cuts and perhaps some further extension of green energy credits.
In other words, whatever the media is claiming about the bill’s chances in the Senate and to be clear, no major outlet I am aware of is currently claiming they are good, it seems likely that despite the wrangling, President Trump and Speaker Johnson’s Big Beautiful Bill will be signed into law by July 4 as planned, once again defying expectations. Whatever their concerns about the bill – and admittedly I’d like to see a lot more cuts and would prefer a different approach to the tax reform proposals – political reality will trump fiscal sanity, which if history is any indication future Congresses might not abide by anyway. Personally, I find the whiplash of the Trump Era to be increasingly ironic: When Trump increased taxes via tariffs everyone screamed that it was the largest in history and the middle class would be punished, but now, though many tariffs remain in effect to offset some of the tax cuts, they are proposing what truly would be the largest in history by reverting back to the old rates. When Trump began slashing the government under DOGE, many of the same people screamed that he was cutting too much, too fast, and disaster would result, only to insist the real problem is that he isn’t cutting enough. In my view at least, some of this is driven by the obvious: If he succeeds in ending taxes on tips and overtime, forget instituting a Trump Account for children, he will earn the trust of working men and women across the country, setting the stage for a coalition that might be durable for a generation, and this perhaps more so than anything else, frightens them most of all.
Confessions of a Conservative Atheist 