The 10 Worst Republican Tax Ideas

We’ve collected some of the worst to help tax-fairness advocates stay on top of all the terrible plans. Listed in the GOP’s apparent order of priority, here are the 10 worst Republican tax ideas.

Bad tax ideas come so fast these days from the Republican government in Washington that it’s hard to keep track. So we’ve collected some of the worst to help tax-fairness advocates stay on top of all the terrible plans. Listed roughly in the GOP’s apparent order of priority, here are the 10 worst Republican tax ideas of the moment: 

Permanently Extend the Expiring Trump Tax Cuts for the Wealthy: To hide the true cost of the 2017 Trump-GOP tax law–which was heavily slanted towards the rich–Republicans made most of it temporary. Those provisions are set to expire at the end of this year, and good riddance to most of them: lower tax rates on the highest incomes; a weakened estate tax that promotes economic dynasties; a phony “small business tax cut” that actually rewards multi-million-dollar business owners; and other expensive giveaways to the rich. (The parts that help workers and families should be preserved.) A full extension would cost about $5 trillion, a cost Republicans have already shown they plan to cover with cuts to healthcare, food aid, education and other public services working-class families rely on. What a bad idea. 

Revive Overly Generous Business Deductions: Republicans were so frantic to cut the corporate tax rate in their 2017 law that they helped pay for it by tightening some rules on how businesses can deduct expenses. But they did it with a grin. You see, though they immediately and permanently cut the corporate rate, they put off for years the operable date of those pay-for reforms. All the lobbyists on K Street assumed Congress would repeal the deduction restrictions before they ever came into being. Well, Democratic victories got in the way and much to everyone’s surprise, the stricter deduction rules began coming on line a few years ago. Now Corporate America is insisting they not only be repealed, but retroactively, so they can get back all the fairer taxes they were forced to pay.

Destroy the IRS: Just when the IRS was starting to recover from a decade of intentional underfunding–using its restored funding to improve customer service and crack down on rich tax cheats–Donald Trump and his co-pilot Elon Musk have apparently decided to destroy the agency altogether. Six thousand IRS workers have been fired in the midst of this year’s tax-filing season, including over a third of the experts who keep tabs on the richest taxpayers. What’s more, there’s reason to believe that Trump and Musk are planning to cut the entire IRS staff in half. If the agency is hollowed out like that, working folks whose income and tax obligations are easy to track will still have to pay their taxes, but they’ll be less likely to receive timely refunds or get calls to the agency answered. Meanwhile, rich tax evaders will find cheating even easier than it has until recently already been. 

Repeal Energy Tax Credits: A central part of the Inflation Reduction Act (IRA) enacted by President Biden and congressional Democrats in 2022 were tax credits promoting green energy like wind and solar. These credits saved homeowners around $8 billion in the law’s first year alone, while combating earth-threatening climate change. Trump wants to repeal the law, and has already frozen its direct spending. Credits making clean energy production cheaper have also helped businesses. Some Republicans in districts that have enjoyed big IRA-spurred investments have organized a mild effort to protect those parts of the law, but all have admitted they would back down if Trump demanded it. 

Reject Billionaire Taxes: Billionaires can go tax free because we never tax their main source of income: the increased value of assets they don’t sell. These “unrealized capital gains” can be as good as a paycheck at the levels they get them, because the super-rich can borrow against those winning investments and pay interest that’s just a fraction of what their tax bill would be if they sold. President Biden and the top Democratic tax writer in the Senate both issued plans to fix this major glitch in the tax code, by forcing the handful of America’s wealthiest households to pay tax on all their income just like workers do. Republicans immediately attacked the idea on behalf of their billionaire backers. 

Pursue ‘Working Class’ Tax Cuts That Will Wind Up Hurting the Working Class: During last year’s campaign, Donald Trump promised to make certain kinds of income tax-free: tips, overtime pay and Social Security benefits. In each case, the most benefit would go to those who need it least (such as tipped waiters in expensive restaurants) rather than those who need it most (low-income Social Security recipients already exempt from income taxes). All three ideas would lose huge amounts of revenue, endangering the funding of public services working people rely on, like healthcare, education and housing. The real way to help low-income people is to raise their income through a higher minimum wage, higher overtime pay, a stronger union movement, and bigger social security benefits for the poorest recipients. But Republicans prefer their bad tax ideas. 

Abolish the Estate Tax: Though it’s a tight contest, this is probably the most devious and destructive of all Republican tax-cut ideas. It’s the ultimate capitulation to the nation’s oligarchs that would ensure that America’s family dynasties continue to grow in wealth and power for endless generations. The GOP claims to be defending small family farms and businesses (p. 11)–which are not in any way threatened–when the real goal is to make idle inheritors unimaginably richer by wasting trillions of dollars that could be used to improve the lives of everyone who wasn’t born rich. 

Fail to Restore Expanded Child Tax Credit: When the Democrats expanded the Child Tax Credit (CTC) a few years ago, child poverty was cut by almost half. When that expansion was allowed to expire, millions of kids fell back into poverty. Senate Republicans blocked an attempt to expand the CTC again in 2024, even though it was (unwisely) tied to the renewal of one of the three business-tax giveaways described above. For the “pro-family” party to resist using their favorite policy tool–tax cuts–to help low-income households is among their worst ideas. 

Cut the Corporate Tax Rate to 15%: The centerpiece of the 2017 Trump tax law was a two-fifths cut in the corporate tax rate. Recall, corporations in 2017 were not hurting: profits and stock prices were regularly hitting records. But Trump and his GOP allies assured us all that their big corporate tax cut would shower goodies on us all: more jobs, higher wages, greater investment. Yeah, none of that happened. Here’s a shock: corporations actually spent their huge tax cuts making their high-paid executives and wealthy shareholders even richer. Now Trump wants to repeat the process by cutting the corporate tax rate by another third or so. Really bad idea. 

Replace the Income Tax With Tariffs: Targeted tariffs–taxes on imported products–can be a great tool to promote domestic industries and protect American jobs. But Trump has proposed replacing the entire income-tax system with tariffs. That would require a huge increase in tariffs on all imported goods–much more than Trump has already imposed on certain items and nations, and even more than the general tariffs he announced in early April–which corporations would use as an excuse to raise consumer prices. Because working people spend a much bigger part of income on consumption than the rich do, it will be lower- and middle-income households who foot the bill. Meanwhile, rich people who receive most of the income and therefore pay most of the income taxes (though at rates that are too low) would suddenly owe nothing at all. Bad, bad, bad idea.