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Yesterday, Rep. Ron Estes (R-Kansas) published an op-ed in Newsweek unpacking the positive outcomes – for individual taxpayers and across the economy – made possible by the Tax Cuts and Jobs Act (TCJA) of 2017, and which are now at risk as several TCJA provisions have or will soon expire. In the op-ed, Rep. Estes’ highlights his bipartisan bill that offers a solution to the expired research and development (R&D) expensing provision that would help restore America’s dominance in R&D and secure American jobs.

You can read the op-ed here or below. 

Trump-Era Tax Cuts Helped the Middle Class. Don't Throw Them Away
A battle over tax policy is brewing on Capitol Hill, with numerous cliffs approaching in 2025. Many of today's representatives were not here when the most consequential tax legislation in more than 30 years, which set the stage for a period of impressive economic growth, became law—but they need to resolve expiring provisions today.

Of our 434 current representatives, half were not members of the House of Representatives when Congress passed the Tax Cuts and Jobs Act (TCJA) in December 2017. Over the past six years, my new colleagues have heard soundbites from the Left and the Right about the bill, but now, as its provisions are expiring, we have to sift through the political noise and pass legislation that will bolster our economy—we need to extend and renew the provisions in the TCJA.

In 2017, numerous pundits, politicians, and politicos were quick to dismiss the law as a tax scheme. Then-minority leader Nancy Pelosi (D-Calif.) stood in the well of the House with a large poster emblazoned with the phrase, "#GOPTaxScam," and made major claims about the bill.

But the real scam is the falsehoods that have persisted about the bill.

In January 2017, nearly a year before TCJA's passage, the Congressional Budget Office (CBO) projected 2023 government revenues would be $4.346 trillion. In December of that year, it estimated that TCJA would reduce annual revenues by $164 billion, meaning revenues this past fiscal year should have only been $4.182 trillion.

Yet FY23 revenues totaled $4.439 trillion, exceeding even CBO's initial, pre-TCJA estimates. The estimates were wrong because they did not account for the revenue growth we are all still benefiting from today.

Though revenue is up, it is far outpaced by our uncontrolled spending. Since FY17, revenue increased 34 percent, but spending increased 54 percent. That increase is over pre-COVID spending, meaning that despite the pandemic ending more than a year ago, Washington's insatiable desire to spend has prevented us from returning to pre-pandemic spending levels.

So while some purport that our massive deficit is the result of TCJA, the data clearly show our massive spending is the real driver.

In addition to revenue growth in Treasury, everyday Americans had more money in their bank accounts thanks to TCJA tax relief.

Analysis from the Tax Policy Center estimated 82 percent of middle-income-bracket taxpayers would receive a tax cut and Treasury estimated 90 percent of earners would see a tax break.

As we've seen, TCJA cut taxes for almost everyone. Nearly all Americans of every income tax bracket saw relief under TCJA. As The New York Times reported in 2019, "ever since President Trump signed the Republican-sponsored tax bill in December 2017, independent analyses have consistently found that a large majority of Americans would owe less because of the law. Preliminary data based on tax filings has shown the same."

However, messaging against the law was so strong that most Americans didn't think they benefited from TCJA. That same Times article stated, "to a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained—and misleading—effort by liberal opponents of the law to brand it as a broad middle-class tax increase."

Six years later, the misleading statements continue.

While the idea that only the top 1 percent benefited from TCJA was far-fetched, it was repeated even by President Joe Biden during his 2022 State of the Union. A year earlier, The Washington Post gave this claim Three Pinocchios. "There is no reason to keep promoting the fallacy that the wealthiest 1 percent got 83 percent of the tax cut," the paper said. "The tax estimates immediately after passage of the tax cut and since then have shown that most Americans received some sort of tax cut."

Beyond immediate tax relief, the legislation proved to be a boon for the economy overall.

After TCJA took effect and before the pandemic, business applications reached a record high while unemployment rates for Blacks, Hispanics and Asians reached record lows. While President Biden has attempted to claim credit for the low unemployment rates among minorities, momentum from TCJA made it possible.

Additionally, since TCJA there has not been a single U.S. corporate inversion, meaning more corporate tax revenue stays within our borders and is reinvested to support jobs and local economies. The projected dip in Treasury's revenues simply did not materialize.

Alongside TCJA's benefits, however, is the harsh reality that some provisions have expired, or will expire soon. Three key provisions expired at the end of 2021, and we've already seen the negative effects of research and development (R&D) amortization that kicked in as a result.

The Tax Cuts and Jobs Act allowed for full, immediate expensing on qualified R&D costs in the year they occurred, but since that provision's expiration, businesses have been required to spread out R&D expenses over five years for domestic R&D and 15 years for foreign R&D. Compare that with China's permanent super deduction for R&D expenses, which allows companies to deduct 200 percent of eligible R&D expenses.

Since amortization took effect, the growth rate of R&D spending has slowed dramatically from 6.6 percent on average over the previous five years to less than one-half of 1 percent over the last 12 months.

As companies spend far less on R&D, the sector is down by more than 14,000 jobs. Three-quarters of research and development spending is on wages and salaries, making R&D amortization primarily a jobs issue.

But there is a solution. On Tax Day of this year, I reintroduced H.R. 2673—the American Innovation and R&D Competitiveness Act—with my Ways and Means Committee colleague Rep. John Larson (D-Conn.). This bill allows for immediate expensing on eligible R&D costs, securing our dominance in research and development.

Of the more than 6,000 bills introduced in the House this year, the American Innovation and R&D Competitiveness Act is tied for the 25th-most cosponsored piece of legislation, putting it in the top 0.3 percent of bills this Congress.

Most of the bills with more cosponsors simply have the full support of their conference and are partisan. My R&D bill is extremely bipartisan—only five other bills have more Republican and Democratic cosponsors than this legislation, and no other bill has this many cosponsorships evenly split between the two parties.

It's no wonder the National Taxpayers Union has consistently called this a no-brainer bill.

The R&D expensing provision is one of many TCJA policies that boosted our economy and should be urgently addressed. It's why 20 of my Ways and Means colleagues joined me last month in sending a letter to Speaker Mike Johnson (R-La.) asking him to bring R&D expensing, a pro-growth interest deductibility standard and full expensing to the House floor immediately.

With just one week left in the House before Christmas, we should immediately pass this common-sense legislation. Then, we should continue to push for more of the TCJA policies that benefitted taxpayers, families, small businesses, the economy and even the U.S. Treasury. The time to address R&D amortization was by the end of 2021—the next best time is now.