Fox News anchor Chris Wallace confronted Senator Bill Cassidy, a Louisiana Republican, over his continued support for former President Donald Trump's signature 2017 tax cuts—pointing out that analyses show they largely benefited the wealthiest Americans and corporations while they are projected to add some $1.5 trillion to the national deficit over 10 years.
Although the Republican-backed Tax Cuts and Jobs Act and its impact on the deficit have been publicly discussed since before they were passed, the tax cuts have drawn renewed scrutiny as Democrats and President Joe Biden have proposed repealing them and raising taxes on the wealthy. GOP lawmakers have balked at this proposal, arguing that tax cuts have benefited the economy and workers.
"I want to take a look at those tax cuts," Wallace told Cassidy during an interview on Fox News Sunday. "According to the Tax Policy Center, the average first year tax cut for a household making less than $25,000—the average tax cut was just $60. The average tax cut for a household making $3.4 million was $193,000. And contrary to talk that it will pay for itself, the Trump tax cuts are now projected to add $1.5 trillion to the deficit over 10 years," Wallace explained.
"Senator, of the two million tax filers in Louisiana, only 14,000 of them were paying more—filing gross income of more than $500,000. So what's wrong with raising the top tax rate to where it was during the Bush and Obama administrations in order to help the working and middle class?" the Fox News host asked.
Cassidy argued that Wallace's analysis was just looking at "first-degree effects." The Republican senator said that "if you look at the overall effect" the pre-COVID-19 pandemic economy had "record-low" unemployment, saying the tax cuts were the cause of that.
Cassidy said that wage growth was "disproportionately in the lower quintiles of the income structure." He mentioned the "flipside" about more Americans working and receiving higher wages "should be emphasized."
Wallace pushed back, pointing out that there is "certainly some data to indicate that the Trump tax cuts benefited the wealthy and corporations more than the working and middle class."
The Fox News anchor then played a clip of Biden's Wednesday evening speech to a joint-session of Congress, in which the president said his proposed American Jobs Plan is a "blue collar blueprint to build America—that's what it is."
"The president says his plan is going to help the working- and middle-class people by making the corporations and the wealthy people—over $400,000 a year—pay more. What's wrong with that?" Wallace asked.
Cassidy argued that academics would say that raising taxes on corporations will lower wages. "You have less investment and you hurt shareholders," he said, pointing to pension funds. "Now if it's OK to lower wages for working people, it's a blue-collar thing. If it's OK to have less investment, it's a blue collar thing," Cassidy said. He argued that higher wages and more investment would not happen under Biden's proposal, describing it as "anti-blue collar."
As Wallace noted, a 2020 analysis from the Tax Policy Center found that the tax cuts passed by Trump and Republicans would add $1 to $2 trillion to the deficit over a decade.
"The Joint Committee on Taxation and the Congressional Budget Office have published several estimates of TCJA's expected budget impact. These estimates all show TCJA substantially reducing revenues and increasing deficits over its first decade. The specific amount varies—from about $1 trillion to $2 trillion...," the report explained.
Polling shows that the majority of Americans are supportive of raising taxes on the wealthy and corporations. The results of a recent survey published by the Pew Research Center found that 80 percent of Americans say that they are bothered significantly by the fact that some wealthy Americans and corporations do not pay their "fair share" of taxes. Furthermore, 59 percent said this bothers them "a lot."
Although Biden has proposed reversing Trump's tax cuts, his administration has repeatedly emphasized that taxes will not be increased for any family earning less than $400,000 per year.
"The president has pledged that no family earning under $400,000 will pay a penny more in taxes. And we've been assiduous in sticking to that pledge," Treasury Secretary Janet Yellen told NBC News' Meet the Press on Sunday.
She pointed out that Biden is just proposing raising taxes back to the "39.6 percent before 2017 for families making over $400,000. And for the tiny group—three-tenths of 1 percent—of Americans making more than a million dollars, that they would be asked to pay on capital gains and dividends that same rate, rather than the far lower rate it is now."
"And President Biden believes, and I agree, that workers shouldn't face higher taxes on their wage income than wealthy individuals do on their rewards from capital," she said.
Newsweek reached out to Cassidy's press secretary for further comment.
