Dr. Bob McClure and Brandon Arnold
If Congress doesn’t act by the end of this year, Florida taxpayers will face smaller paychecks and a more complicated tax filing process next year.
That’s why it’s crucial for President Donald Trump and Congress to renew the tax cuts now through One Big Beautiful Bill.
Passage will be a huge win for Floridians.
Even though the Sunshine State doesn’t impose a state income tax, residents still pay federal income tax. The 2017 Tax Cuts and Jobs Act (TCJA) cut income tax rates for most Americans, delivering an average savings of $2,100 for Florida taxpayers.
But if that law expires, Floridians will have to tack on an average increase of $3,650 to their federal taxes because of higher tax rates, a reduced standard deduction, and a smaller child tax credit.
Thankfully, the House has given first round approval to One Big Beautiful Bill that extends many of the TCJA’s provisions permanently. But there’s still a long way to go. The bill is now with the Senate, which has the chance to make it a better deal for taxpayers.
One of the biggest threats to the bill is the push from some lawmakers to eliminate the State and Local Tax (SALT) deduction cap. That cap limits how much in state and local taxes high-income households can deduct from their federal tax bill. Raising the cap would be a massive giveaway to poorly run high-tax states like New York and California.
New York, for instance, spends more than twice as much as Florida on a per person basis. Floridians should not bail them out for their fiscal mismanagement. States should have to fix this mess on their own, which is why the Senate should not blow open current limits on the SALT deduction. Even better, they should kill the SALT deduction altogether.
The Senate should also make other improvements to strengthen the bill and put our country’s finances on a more solid future footing.
First, it’s time to repeal the costly and regressive green energy tax credits included in the Inflation Reduction Act. These provisions would cost taxpayers up to $1 trillion over 10 years, and the Government Accountability Office has warned they carry a high risk of fraud because of their complexity and scale. Ending these subsidies now will free up resources for more widespread tax reform.
Second, we need meaningful Medicaid reform. The program is essential for people who are low income and disabled or pregnant. Unfortunately, it’s riddled with waste and fraud. Improper payments cost taxpayers more than $30 billion each year, and some funds are being misused on items like gym memberships and music lessons, which are well beyond the program’s intent.
Congress should refocus Medicaid on serving those who need it most and crack down on practices that allow state governments to launder federal funds to pad their own budgets.
Finally, Congress should make permanent the TCJA’s cost recovery provisions, which allow businesses to deduct the cost of investments in equipment and research. These measures promote economic growth and job creation, especially in sectors like manufacturing and agriculture. Making them permanent could more than double the economic growth from the One Big Beautiful Bill.
Florida families deserve to keep the lower taxes and simpler tax code they’ve relied on over the past several years. Letting the Tax Cuts and Jobs Act expire would hit household budgets hard, drain dollars from local businesses, and put the brakes on economic growth.
The Senate has an opportunity to not only extend these tax cuts, but improve on them. That means rejecting costly carveouts like enlarging the SALT cap, repealing green energy subsidies that waste taxpayer money, reforming Medicaid to serve its true purpose, and making pro-growth provisions like full cost recovery permanent.
Congress must act now to protect families, fuel America’s economic engine, and cement a tax code that rewards ingenuity and investment, not loopholes.
Dr. Robert McClure is president and CEO at The James Madison Institute. Brandon Arnold is executive vice president of National Taxpayers Union.
Originally found in News-Press and Naples Daily News.
