Congressional Republicans are weighing how to go on offense over tax reform as Democrats accuse them of crafting a bill that amounts to a handout to the rich.
For months, Republicans have warned that voters will face the “largest tax hike in U.S. history” if President Donald Trump’s 2017 Tax Cuts and Jobs Act is not extended at the end of the year, but the party is searching for new and more granular ways to sell the legislation’s benefits for the working class.
On Friday, House Republicans’ campaign arm began airing ads focusing in part on the child tax credit, which will be cut in half if the law is not renewed. The advertisements target 25 vulnerable House Democrats who voted against a blueprint last week that allows Republicans to begin drafting the bill.
Republicans are even considering allowing the wealthiest earners to face a top marginal tax rate of 40%, in effect abandoning the lower rate of 37% in their original bill.
Trump’s 2017 tax cuts will be considered this year alongside a spate of working-class tax proposals he promised on the campaign trail last year, likely giving Republicans new provisions to tout as the law’s renewal becomes a subject of the 2026 elections.
But Republicans are simultaneously batting away accusations that the party wants to cut popular welfare programs to pay for provisions that do help the wealthy, including a doubling of the estate tax deduction. They have faced a steady drumbeat of Democratic attacks drawing attention to the rollback of Medicaid demanded by fiscal hawks.
“Democrats are in a more advantageous situation than normal because we are talking about deep spending cuts under the auspices of balancing the budget and trying to address our long-term debt, at the same time as we are talking about tax cuts that would benefit higher net worth taxpayers,” GOP strategist Jason Roe told the Washington Examiner.
Republicans are, to some extent, stuck with that narrative. Fiscal hawks succeeded in forcing $1.5 trillion in budget cuts to help pay for Trump’s agenda, which includes tax reform but also his border, defense, and energy priorities.
That means some level of reforms are likely to Medicaid, with work requirements seen as the most politically palatable by Republicans.
Still, Republicans have begun to push back more forcefully in recent days. After the blueprint cleared the House last week, Speaker Mike Johnson (R-LA) and his deputy, Majority Leader Steve Scalise (R-LA), assured reporters that Republicans would protect “essential programs” like Medicaid.
Policies like work requirements, they argued, were necessary to ensure benefits were not siphoned away from those beneficiaries who need it most.
Roe said the GOP could “neutralize” the Democratic attacks if they hammer home “no tax on tips” and “no tax on overtime” — two campaign promises Trump used on the campaign trail to appeal to the working class. He also thinks Republicans would be more successful at marketing the tax cuts if the administration could provide concrete proof of a trillion-dollar reduction in deficit spending.
The months of ambiguity, driven in part by a GOP fight over the Medicaid cuts, have allowed Democrats to emphasize the perceived political negatives of the legislation.
“I think it makes it harder to attack Republicans on the tax cuts [then], because taxes are still unpopular, and I think voters would more willing, I would say more desirous, of spending cuts than they are paying higher taxes,” Roe said.
A selling point for Republicans could come from Trump’s openness to levying a new tax on millionaires to offset the cost of his legislative goals. He met earlier this month with Senate Budget Committee Republicans, with sources telling the Washington Examiner he was receptive to hiking the top marginal tax rate for individuals back to 40%.
However, Johnson poured cold water on the 40% rate over the weekend, making its path through Congress unlikely with unified Republican control of Washington.
“I’m not a big fan of doing that,” Johnson told Fox News’s Sunday Morning Futures when asked about the possible change. “We’re the Republican Party, and we’re for tax reduction for everyone. So, I mean, that’s a general principle that we always try to abide by.”
Johnson faces an uphill battle to get Trump’s agenda passed through the House with his slim majority, particularly as fiscal hawks warn their support is contingent on leaders following through on their promises to find over $1.5 trillion in cuts.
Another bump in the road came from the White House’s “Liberation Day” tariffs, which rattled stock and bond markets for days before he announced a 90-day pause last week. Republicans have urged quick passage of their tax bill to ease skittish financial markets.
GOP strategist John Feehery told the Washington Examiner he thinks Republicans need “fresh messaging” that focuses not just on tax cuts but the economy more broadly. He said the GOP should tie the 2017 law’s renewal to a broader populist shift in the GOP and market them as the key to a “booming working class” and providing “more money at home.”
Roe agreed that Republicans should look at tax cuts through the lens of tariffs. Whether tariffs are paused, abandoned, or implemented, Roe said, inflation will rise, and the GOP should tell voters that tax cuts would offset “some of the pressures that folks have with household incomes.”
“I think you have to tie it as part of a larger strategy that, it is not tariffs in one silo and taxes in another silo,” Roe said. “I think they have to be talked about as being hand in hand part of the rebuilding of the American manufacturing sector.”
Trump’s approval ratings have dropped as the public offers mixed reviews on his handling of the economy, with 44% supporting his performance and 49% believing Trump’s policies were making them financially worse off. That is down from 51% and up from 42%, respectively, at the beginning of March.
Peter Loge, a political scientist and director of the School of Media and Public Affairs at George Washington University, told the Washington Examiner that both parties should take advantage of the economic climate and treat tax cuts as a “character” in the narrative.
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“As a Republican, I would say, ‘As tariffs chew away at your portfolio, now is not the time to raise your taxes,’” Loge said. “If I were a Democrat, I would probably say that ‘giving Elon Musk a tax break never created a job in Ohio. Elon Musk doesn’t need a tax break. Hardworking Americans do.’”
“Voters don’t walk around with collections of views about taxes on one hand and tariffs on the other hand,” Loge added.