Congress

How Trump’s Very MAGA Tax Cuts Break with GOP Tradition

Published

12 months ago

July 5, 2025

For decades, Republicans have extolled the virtues of removing loopholes and carveouts from the tax code, arguing it would make the system fairer and more efficient, while allowing for lower overall tax rates.

“The tax code is littered with hundreds of preferences and subsidies that pick winners and losers and create complexity,” House Republicans led by then-Speaker Paul Ryan and then-Rep. Kevin Brady, said in their 2016 tax plan. “Instead of free-market competition that rewards success, our tax code directs resources to politically favored interests, creating a drag on economic growth and job creation.”

Fast forward to the present day, and one thing is for sure: President Donald Trump’s One Big Beautiful Bill is not an exercise in tax simplification.

Instead, it began with a push to extend the party’s 2017 tax cuts — which despite some streamlining also introduced some complexity — and piled more on top, in line with a slew of presidential campaign promises. Add in a heavy dose of congressional politics, and the result was a sprawling and quirky piece of legislation that is distinctively Trumpy: lower taxes and a bigger pile of tax breaks.

“It’s certainly a departure from what Republicans were trying to do in 2017 and broadly a departure from what Republicans have been arguing for decades about tax reform,” Kyle Pomerleau, a senior fellow at the conservative-leaning American Enterprise Institute, told me.

The question, though, is not just whether doing your taxes is complicated and annoying. It’s whether that complexity serves a particular purpose. For example, a provision in the GOP bill allows businesses to deduct expenditures on machinery and equipment entirely from their taxes, which could both encourage investment and support Trump’s reindustrialization goals.

For other key parts of the bill, several economists I spoke with worried it is the worst of all combinations: increasing the debt to pay for tax breaks that lead to neither growth nor other economically useful outcomes.

“I don’t want to say it’s vote-buying because that’s probably a normative statement that is outside of my wheelhouse, but … there’s not a lot of pro-growth stuff,” said Kent Smetters, a University of Pennsylvania business professor who serves as the faculty director of the Penn Wharton Budget Model.

Take, for example, Trump’s popular campaign promises of no tax on tips and no tax on overtime. In some cases, those provisions simply reward people for their existing lifestyle. In others, it might lead businesses to restructure how they pay their employees.

It’s obviously great news either way for the employees who benefit. It’s just unclear why the government is choosing to reward these particular subsets of workers over others. (It is presumably not an accident that Trump promised this tax perk to voters as he was pushing in the last election to win Nevada, a state where many hospitality and gaming industry workers rely on tipped income.)

And cutting taxes without finding some way to offset the lost revenue — either by closing loopholes to broaden the scope of people and businesses that are taxed, like in 1986, or through some other method — leads to increased debt that can itself be a drag on growth. After all, investors are lending the money to the U.S. government rather than doing something else with it. And even after spending cuts, the new GOP tax law is still expected to add trillions to deficits over the next decade.

“The money has to come from somewhere,” said Alan Auerbach, a professor at the University of California at Berkeley.

In that sense, the tax cuts under President George W. Bush weren’t the ideal way to structure policy either, as they mostly just lowered rates while increasing the debt. But this bill? “It’s worse than the Bush tax cuts because the scale is so much bigger, and there’s a lot more weird stuff in it,” Auerbach said.

The gargantuan scale and eccentricity of the tax package is a reflection, above all, of the president who propelled it into law, and it reveals how much the Republican Party has changed under his leadership. In the 2016 GOP policy document, under Ryan and Brady’s direction, the party cited tax reform legislation passed in 1986 — which decreased the number of tax brackets, slashed deductions and lowered rates — as a guiding light, saying the party’s goal was to “replicate and build upon this achievement.”

But this is now the party of Donald Trump, not Ronald Reagan.

Trump, in a 1999 Wall Street Journal op-ed, referred to the bipartisan 1986 law as “an offense against the working man,” decrying the removal of certain deductions as “predictably disastrous.”

Now the Trump administration needs to defend the law and all its peculiarities.

Joe Lavorgna, who works at the Treasury Department as a counselor to Secretary Scott Bessent, said many critiques of the new law miss the point. A critical priority for Trump, he said, was avoiding the expiration of the 2017 tax cuts, which would have led to higher tax rates and therefore slower growth.

He said language that allows people to deduct the interest they pay on auto loans for American-made cars, for example, will help boost the goal of having a “vibrant, healthy” domestic car industry.

Lavorgna also said the provision removing taxes on overtime will lead to more output. “Anything that incentivizes people to work an extra hour because they’re not going to be taxed on it or be taxed at the same rate” creates benefits for the economy, he said. “It’s not a giveaway. They’re creating something.”

As for no tax on tips? That will “help people who have been under significant cost of living pressure,” he said.

Ultimately, what’s clear is that cutting taxes is still the centerpiece of the Republican Party — the rallying cry that could bring together a fractious governing coalition.

But tax reform? That conservative dream seems to have died quietly.

Congress

Senate votes to halt Iran war despite Trump’s push for peace deal

Published

2 hours ago

June 23, 2026

Blue Light Newsroom

The Senate on Tuesday voted to cut off the U.S. military campaign against Iran, handing a fresh loss to President Donald Trump despite his attempts to convince lawmakers and the public that a deal to end the war is at hand.

Four Republicans broke ranks to help approve a resolution to block further military action unless it is green-lighted by Congress.

The war powers measure is largely symbolic — the resolution cleared Tuesday doesn’t go to the president to sign or veto. But the bipartisan 50-48 vote is a damaging milestone for the Trump administration: Both the Senate and House have now weighed in against the Middle East conflict that’s stretched on for more than 100 days. The same measure passed the House in early June after months of close calls.

Congress

Housing bill threatened in GOP elections-bill spat

Published

2 hours ago

June 23, 2026

Blue Light Newsroom

The long-anticipated bipartisan housing bill is under threat from a Florida Republican who threatened to “shut the floor down” if House GOP leaders move forward with passing it Tuesday.

Rep. Anna Paulina Luna said Republicans instead need to prioritize passage of the SAVE America Act, the GOP elections bill that has been stuck in the Senate for months. Speaker Mike Johnson has scheduled a Tuesday evening vote on the housing bill in hopes of sending it to President Donald Trump for a planned Wednesday signing at the White House.

Luna posted her threat on social media Tuesday afternoon and later specified in an interview that she would oppose procedural measures teeing up GOP-backed legislation going forward if party leaders didn’t abandon their plans to hold the housing bill vote via special fast-track procedures that would effectively sideline Republican hard-liners.

Luna cannot single-handedly block those procedural votes, but she said there is “a group” of lawmakers who would join her. She separately called on Trump to veto the housing bill in a bid to force the SAVE America Act to be added to it.

Johnson plans for now to proceed with the Tuesday evening vote on the housing bill, according to two people granted anonymity to discuss internal conversations. If Luna and her unnamed allies follow through with their threats, they could derail a pair of appropriations bills set for House consideration this week and potentially freeze the floor indefinitely given the GOP’s razor-thin majority.

“I have been telling them,” Luna said of her complaints to GOP leaders.

Congress

Top tech executives expected to testify at July 28 Senate hearing

Published

4 hours ago

June 23, 2026

Blue Light Newsroom

The Senate Judiciary Committee is tentatively planning to have top tech executives testify at a July 28 hearing, according to five people with knowledge of the committee’s plans granted anonymity to discuss private negotiations.

Judiciary Committee Chair Chuck Grassley (R-Iowa) had previously summoned the CEOs of Meta, TikTok, Snapchat and Google to a hearing, originally scheduled for Tuesday, to discuss their online child safety practices, AI safety and other topics.

“Chairman Grassley looks forward to a productive hearing as he continues his bipartisan efforts to get lifesaving child safety legislation signed into law,” a spokesperson for Grassley told Blue Light News.

The hearing, which remains provisional, comes at a pivotal moment for the tech sector. Congress is actively debating legislation aimed at protecting children online, while courts and state attorneys general are intensifying pressure on social media companies over allegations that their platforms harm young users.

The list of tech executives the committee is eyeing to testify remains in flux but currently includes head of Instagram Adam Mosseri and YouTube CEO Neal Mohan, according to the five people. Three of the people said Snapchat CEO Evan Spiegel and CEO of TikTok’s U.S.-based joint venture company Adam Presser may also be called to attend.

The four companies did not immediately comment on the proposed hearing.