Chairman of the House Ways & Means Committee Rep. Jason Smith, R-Mo., talks during Tuesday's hearing about making Trump's tax cuts permanent. (House Ways & Means)
Smith's concerns were also echoed by other Republicans on the committee during Tuesday's hearing.
"I guess my colleagues want to go back to when we had higher tax rates than communist China," said Rep. Jodey Arrington, R-Texas. "What's pro-American about that? How are we going to unleash economic growth, job creation, and prosperity with that kind of tax rate? We reduced it to 21% and we're not even in the top quarter of the most competitive tax rates. So, I guess my colleagues want to go back to the highest business tax rate in the free world. It makes no sense."
"The 21% rate in the United States of America – when you add the average state rate across the United States – is at 25%," added Rep. Kevin Hern, R-Okla. "Our greatest adversary in the world economically – no one is even close – is China at 25%."
Closeup woman filling form of Individual Income Tax Return. (iStock)
However, Democrats at the hearing argued that an extension of Trump's tax cuts will benefit the ultra wealthy more than anyone else. They also argued that Republicans are ignoring the deficit impact, and not providing adequate solutions for how to pay for the extended cuts, noting that increased deficits could result in increased interest rates, a grater cost burden for middle-class people and less economic growth.
"There's no free lunch here," said Brendan Duke, senior director of economic policy at the left-leaning Center for American Progress. "The tax cuts will likely be paid for eventually in the form of spending cuts or tax increases down the line. In the meantime, continued, or even higher deficits could mean continued or even higher interest rates. That makes housing, student loans and credit card debt less affordable for working people."
PLANNED PARENTHOOD CHAPTER PROVIDED HARRIS CAMPAIGN WORKSPACE, BREAKING TAX LAW: IRS COMPLAINT
"Republican reliance on tariff taxes to off-set their tax breaks for the super wealthy will continue to shift the tax burden to some of the very type of businesses that [Republicans want to protect]" warned Democratic Texas Rep. Lloyd Doggett. "The biggest loser of their plan overall will be our debt, but the impact that that has on the solvency of Social Security, and Medicare and other investments, is also very critical. So, as we move forward we need to consider all of these impacts and look for a tax code that is mor fair for working Americans and less of a gift to those at the top."
Rep. Lloyd Doggett, D-Texas, stops to speak with a reporter inside the underground tunnels underneath the U.S. Capitol ((Photo by Bill Clark/CQ-Roll Call, Inc via Getty Images))
In response to the battle in Congress over the expiring tax cuts, a fiscally conservative political advocacy group, Americans for Prosperity, launched a $20 million campaign to urge lawmakers on Capitol Hill "to protect prosperity" by renewing Trump's tax cuts.
The campaign will include ads in all 50 states as the group says Congress is "facing a countdown to crisis that threatens the family budgets of virtually every American." Notably, Americans for Prosperity, endorsed Trump's presidential contender Nikki Haley prior to Trump becoming the GOP's nominee.
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