Pence group pushes Trump tax cuts as GOP debate on tariffs looms
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Former Vice President Mike Pence. Photo: Noam Galai/Getty Images
The battle has begun over what should become of former President Trump's signature tax law — many provisions of which are scheduled to expire next year — and Trump's former vice president is leading a new offensive to extend them.
Why it matters: Mike Pence's group Advancing American Freedom plans to spend $10 million to try to influence the tax debate over the next 18 months, pushing a pro-business tilt that contrasts with both the Biden administration and some populist Republicans who have Trump's ear.
- The campaign will include "direct engagement with Capitol Hill through seminars, policy memos, and media alongside targeted grassroots activation focused on the ongoing tax and spending debate," AAF said, unveiling a document making its case.
State of play: Much of the Tax Cuts and Jobs Act (TCJA), enacted in 2017, expires at the end of 2025. That includes lower individual income tax rates, a larger standard deduction, a higher exemption for the estate tax, and many more.
- It sets up an intense legislative battle next year over what to extend, what to change, and what to allow to expire.
- The outcome will depend on who wins the November elections — but groups on all sides of the debate are starting to articulate positions and draw up battle plans.
Between the lines: Mainstream Republicans view the TCJA as Trump's signature domestic achievement and believe it had wide-ranging economic benefits, particularly by incentivizing business investment.
- But even if Republicans sweep the House, Senate and White House, fissures within the GOP would need to be resolved before what's likely to become a party-line vote.
- An emerging populist wing of the party — the most visible members include senators J.D. Vance (R-Ohio) and Josh Hawley (R-Mo.) — is more hostile to large corporations and more open to aggressive use of tariffs than traditional Republicans like Pence.
- Some in the Republican caucus are even open to raising the corporate income tax rate, House Ways and Means Committee Chair Jason Smith said recently — a non-starter to supply-side conservatives.
Meanwhile, Biden seeks to undo many of the tax changes that benefit those earning more than $400,000, and wants to raise the corporate income tax rate from the current 21% to 28%.
- Even if Biden prevails in the presidential race, Republicans could win one or both houses of Congress, giving them significant leverage in shaping the post-2025 tax code.
