As the Republican reconciliation bill expanding and making permanent the Tax Cuts and Jobs Act gets closer to the finish line, Democrats and their media allies are ramping up their false attacks in a desperate attempt to stop it. Let's take a moment to correct the record.
Democrats' main misinformation is that the bill is tax cuts for the rich. "This bill is a scam, a tax scam designed to steal from you, the American people, and give to Trump's millionaire and billionaire friends," claims Rep. Jim McGovern.
This incessant talking point has no bearing on reality. Start with the fact that the TCJA actually made the tax code more progressive. The top 1% now pay over 45% of all taxes, the top 10% pay more than three-quarters, and the bottom 50% pay less than ever before. The GOP bill locks in these equitable tax shares permanently.
Most of the tax cut expansions in the bill specifically target hardworking Americans and small businesses and are off-limits to the rich. For instance, the House bill's expansion of the small business tax deduction from 20% to 23% phases out at around $200,000, meaning it's available primarily to Main Street small businesses—cafes, bars, auto shops, carwashes, record stores—that are the beating heart of American communities and the backbone of our economy.
The bill also exempts tips and overtime pay from taxes. And it expands the standard deduction, boosts the child tax credit, and cuts taxes for seniors— i.e., ordinary folks, not the rich.
According to the Joint Committee on Taxation, the bill lowers the tax burden on those making between $30,000 and $80,000 by 15%. The JCT's analysis finds the tax bill will reduce the effective tax rate for those earning less than $100,000 to around 10% or less, while the wealthiest will pay effective rates that are close to 30%.
Another false claim Democrats are parroting is that the bill threatens America's perilous fiscal situation. "They know it's going to increase the deficit by up to five trillion dollars," claims Senate Minority Leader Chuck Schumer. Since when does the Left care about the debt?
What deficit analyses like the one by the Congressional Budget Office overlook is the corresponding economic effects that tax cuts produce by encouraging businesses, workers, and investors.
Hence CBO's terrible prediction record, including with the original TCJA. Despite its dire predictions, the economy and inflation-adjusted federal tax revenues (not including tariffs) have significantly grown since the law was passed in 2017. Tax collections for fiscal 2024 were half a trillion dollars higher than CBO had projected, even without the tax cut.
The reality that Democrats hide is that the deficit is 100% driven by their reckless spending. Federal outlays ballooned from $4.5 trillion per year before the pandemic to $7 trillion today.
Finally, Democrats disinform by claiming the bill takes away Medicaid and Food Stamps from the poor. "This bill guts Medicaid," claims Rep. Sean Casten and means "more seniors, children, veterans, and people with disabilities go to bed hungry," says Sen. Amy Klobuchar.
Yet in reality, the bill merely implements modest work requirements for those without dependents based on the moral principle you shouldn't get something for nothing. My mother taught me that it's fine to need and to receive, but you should always give back if you are able. Most Americans support this wisdom, with the overwhelming majority backing work requirements for welfare.
Requiring work as a condition of Medicaid and SNAP benefits will boost the labor force participation rate, helping small businesses looking to hire. Work requirements will also help preserve these programs for those who truly need it, including children, seniors, the disabled, and pregnant women. This sensible provision can slow runaway social spending and encourage young men and women to live productive lives — something that should unite us all.
A pro-family, pro-small business tax policy shouldn't be a partisan flashpoint. If Democrats focused less on ideological soundbites and more on practical outcomes, they could join Republicans to deliver this historic tax relief that is equitable, effective, and enduring.
Alfredo Ortiz is CEO of Job Creators Network, author of "The Real Race Revolutionaries," and co-host of the Main Street Matters podcast.
