Elizabeth Warren Urges Democrats Not To ‘Roll Over’ On Tax Fight In 2025
Sen. Elizabeth Warren (D-Mass.), a leading figure in the Democratic Party’s liberal wing, warned her fellow Democrats on Monday to not shy away from next year’s fight over whether to extend temporary tax cuts enacted by former President Donald Trump in 2017.
“The 2025 tax fight will create a huge opportunity to break with decades of tax-cutting political orthodoxy and reshape the tax code to reflect our nation’s values by raising taxes on the wealthy,” Warren said in remarks to be delivered at the Washington Center for Equitable Growth think tank and obtained by HuffPost.
“But let’s be crystal clear: if Democrats take the coward’s way out and sign our names to a half-baked deal that lets the wealthy off the hook, it will be a huge failure — and one the American people cannot afford,” she said.
The 2017 tax cuts consisted of two main parts: a cut in corporate tax rates and cuts in rates and bigger deductions for individual income taxpayers. The latter part, however, was made only temporary to keep the tax cut’s costs down, even though Republicans wanted them to be permanent. The last year for which they are in effect is 2025.
According to the nonpartisan Congressional Budget Office, expiring individual tax cuts amount to about $4.6 trillion, though the White House’s National Economic Council has put the tab higher at $4.9 trillion.
Having a large number of temporary tax cuts expire and then accusing Democrats of raising taxes by not extending them is a strategy that the GOP has used before. The George W. Bush administration enacted two big rounds of tax cuts in 2001 and 2003 and set them to expire in 2010.
They were extended in full for two years before former President Barack Obama agreed to extend most of them permanently in the 2012 “fiscal cliff” negotiations. Warren made it clear that she did not want that to happen again in 2025.
“Why did those cuts cost $8 trillion? Because [Bush’s] Democratic successor, President Obama, cut a deal with Republicans to make nearly all of Bush’s temporary cuts permanent. The impact on the national debt was staggering,” she said.
“Republicans are running the same play again. It’s why they created the 2025 tax cliffs — lowballing the cost of the Trump tax cuts by making them temporary and counting on Democrats to roll over again to make them permanent.”
Warren cited failed negotiations this year that she said would have allowed for $3 in business tax cuts for every $1 in individual tax cuts in the form of child tax credits. She said the GOP tanked the deal because it believes it can get a better one next year.
She also took a swipe at her former party colleague, Sen. Kyrsten Sinema (I-Ariz.). Sinema, who left the Democratic Party in December 2022 and is not running for reelection, put some limits on tax hikes included in the Inflation Reduction Act in 2022.
“Kyrsten Sinema agreed to raise taxes on the very largest 200 businesses, but basically no one else. And she kicked up a particular fuss about anyone raising taxes on giant private equity firms,” Warren said.
Instead, Democrats should talk about their values and reflect them in the tax code by taxing the rich, the senator said.
“The American people are telling us that they are ready for a tax code that promotes their values, and Democrats must be ready to deliver,” Warren said.
