(The Center Square) – The Republican budget resolution, which among other things would extend the expiring 2017 Tax Cuts and Jobs Act, has sparked concerns over the resulting trillions of dollars in federal revenue loss.
But if the One Big Beautiful Bill Act fails to pass, the average taxpayer will face a 22% tax hike and 91% of American taxpayers will see their guaranteed income deduction slashed by nearly half.
While Democrats have accused Republicans of crafting an overly expensive bill that only benefits the wealthy, most GOP lawmakers have pushed back. The TCJA lowered tax rates for six of the seven tax brackets and left the lowest bracket at 10%.
Unless lawmakers craft separate legislation, tanking the OBBBA will return rates to pre-2017 levels. A family of four making $80,610 annually, the median U.S. income, would see a $1,695 tax increase.
About 40 million families would also see their Child Tax Credit – currently capped at $2,000 under the TCJA – halved, while the paid family leave tax credit initiated in 2017 would expire completely.
Two million family farmers impacted by the Estate Tax would have to pay a whopping 40%, double the existing 20%.
American businesses would also take a major hit. A business tax credit allowing companies to get full reimbursement for new capital investments, an expanded deduction for corporations’ interest on debt, and immediate deductions for companies’ research costs would all end.
Additionally, the 20% Qualified Business Income (QBI) deduction would end, impacting approximately 26 million small businesses who would see a 43.4% top tax rate
Millions of Americans, particularly blue-collar workers, would likely lose their jobs as well. According to a study by the National Association of Manufacturers, letting the tax cuts expire could lead to 5.9 million jobs lost and a $540 billion reduction in employee compensation nationwide.
“This bill is going to protect Americans from a $4.3 trillion tax increase, most of which, $2.6 trillion of which, goes on people who are not millionaires,” Senate Finance Committee Chairman Mike Crapo, R-Idaho, told KBOI Radio Friday.
Democratic Sen. Mazie Hirono, D-Hawaii, disagreed.
“I’ve said it before and I’ll say it again, Republicans’ big, beautiful betrayal bill will hurt millions of hard-working Americans, not to mention, add trillions to the deficit,” Hirono said Friday on X.
Republican leaders are hoping to pass the OBBBA by July 4. Currently, the House-passed version authorizes a 10-year TCJA extension, while the Senate committee-amended version calls for a permanent extension. Budget organizations say either option will add trillions to the federal debt and deficit, even accounting for projected growth.