COLLECTION ā¢ FEBRUARY 11, 2025
No Tax Cut Is Free
Foreword: You Have to Pay For That
Conservatives have the opportunity to craft responsible tax reform that will reduce inflation, promote growth, and build confidence in Americaās ability to get its fiscal house in order.
Implement a Market Access Charge
Promoting U.S. exports and reducing the trade deficit
Implement a 10% Global Tariff
Reducing the fiscal deficit while reducing the trade deficit
Rescind Chinaās Permanent Normal Trade Relations Status
Ending our reliance on China and protecting the U.S. economy
Reform the De Minimis Exemption
Ending Chinaās trade giveaway while protecting Americans
Increase the Corporate Rate to 25%
Raising revenue while maintaining U.S. competitiveness
Eliminate the Carried Interest Deduction
Treating investment managers like everyone else
Repeal the Electric Vehicle Tax Credits
Eliminating āgreenā distortions to American vehicle and energy markets
Expand the University Endowment Tax
Distinguishing between universities and hedge funds
Overview
For nearly 250 years, America lived within its means, entering the new millennium with public debt below one-third of GDP and a budget surplus. That fiscal discipline has collapsed over the past quarter-century, with deficits growing under both partiesāand through multiple crisesāreaching a projected $1.7 trillion this year despite strong economic conditions.
True fiscal conservatism requires not just restraining spending but paying for necessary expenditures. While the Tax Cuts and Jobs Act of 2017 (TCJA) included important reforms worth preserving, such as immediate capital expensing and an expanded Child Tax Credit, its extension must be paid for through some combination of spending cuts and revenue increases. This collection focuses on the latter, highlighting eight opportunities to raise substantial revenue while advancing conservative priorities: implementing new trade policies, reforming preferential treatment of corporations and investment managers, and eliminating costly subsidies for progressive priorities. By combining targeted TCJA extensions with spending discipline and these revenue measures, conservatives can craft tax reform that reduces inflation, promotes growth, and demonstrates America’s capacity for fiscal responsibility.
Listen to the “No Tax Cut is Free” episode of the American Compass Podcast here.
