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Opinion: Extend Trump's 2017 tax cuts to promote growth, but cut spending too

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Opinion: Extend Trump's 2017 tax cuts to promote growth, but cut spending too

America approaches a critical juncture. Many provisions of the Tax Cuts and Jobs Act of 2017 are set to expire this year. Congress could let them lapse, but that would mean a large, economically damaging tax hike for most Americans. Lawmakers could make all the cuts permanent, but without revenue offsets that would deepen the nation’s disastrous debt load.

There is a more targeted and responsible way to deal with this fiscal dilemma.

It’s a common, politically fueled mistake to talk about cutting taxes without also talking about our fiscal situation. We’re $37 trillion in debt — going on $59 trillion in a decade — and after years of alarming growth, the annual spending deficit is roughly $2 trillion. We also must grapple with the looming entitlement crisis, and interest payments on government debt are the fastest-growing budget item. Times are changing, making fiscal responsibility more crucial than ever.

While the upfront cost of the tax cuts back in 2017 was $1.5 trillion, on paper, to make them permanent could cost $4.6 trillion. The actual cost should be cheaper, as projections underestimate a likely increase in taxable income, investment and growth. But we shouldn’t deny that there is a significant cost.

There are also plenty of lessons to be learned from the 2017 reform. The first is that not all tax cuts are equally pro-growth. As such, we should make permanent only the most pro-growth provisions and allow others to expire or be extended on a short-term basis.

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To the extent that the 2017 cuts spurred growth and higher revenue, that was mostly the product of the permanent reduction of the corporate tax rate from 35% to 21%. This provided businesses with long-term certainty, encouraging investment, capital formation and wage growth. Unlike temporary tax cuts, which lead to short-term boosts but create uncertainty, a permanent lower rate lets firms plan, expand operations and increase productivity.

Paired with the soon-to-expire provision that allows firms to fully expense their investments, the permanent corporate cuts attracted more domestic and foreign investment, leading to higher economic output and job creation over time.

A new Hoover Institution study reveals that businesses are more responsive to corporate tax changes than previously thought. Analyzing the 2017 cuts, Kevin Hassett (the National Economic Council’s new director), Jon Hartley and Josh Rauh found that a one-percentage-point reduction in the cost of capital can boost investment rates by up to 2.4%, surpassing earlier estimates.

Congress should hence prioritize making full expensing of capital investment permanent. It could also extend it to investments in structures.

Similarly, the cuts to individuals’ tax rates should be made permanent. This provision encourages work, savings and investments, especially for high earners, fostering a more dynamic and resilient economy. Recent research by Rauh and Ryan Shyu on California tax increases shows how much more sensitive high-income filers are to rate changes than most research generally assumes. The economists looked at taxpayers’ responses after Proposition 30 increased marginal tax rates by up to three percentage points for high-income households. An extra 0.8% of these taxpayers left the state as a result, and those who stayed reduced taxable income, eroding up to 61% of expected revenue within two years. This sensitivity to high tax rates and our progressive federal tax code mean that letting individual tax cuts expire will have a bigger impact than projected, and extending them will have a smaller deficit impact than most fear.

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While the economics are straightforward, congressional rules are not. Budget reconciliation is a special process allowing Congress to pass tax, spending and debt-related bills with a simple Senate majority, bypassing the filibuster. But it’s limited to budgetary matters by the Byrd Rule and cannot increase the deficit beyond a 10-year window without offsets.

That leads us to the second lesson: Legislators should make permanent the 2017 measure’s revenue-raising provisions and cut some spending as well.

Extending the limits put on the state and local tax (SALT) deduction and mortgage interest deduction, and the removal of the personal exemption (a $4,050-per-household-member exclusion from taxable income) would generate significant revenue — more than covering the cost of the most growth-oriented tax cuts. Congress also needs to remove other tax breaks such as the corporate SALT deduction, energy subsidies and incentives for stadiums, just to name a few, and cut other spending to make it work.

Finally, all the other, costlier and less pro-growth (though popular) provisions should be extended on a temporary basis. These include the Child Tax Credit expansion, the larger standard deduction and alternative minimum tax reductions, which could be set to expire in a few years instead of being made permanent. That would help manage deficits while giving time for Congress to debate each one.

A similar approach could apply to Trump’s proposed new tax breaks on tips, overtime pay and Social Security benefits, which aren’t pro-growth and could cost $5 trillion over a decade.

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A one-vote Republican House majority makes the process of extending the tax cuts even through reconciliation challenging. Setting strict priorities and guidelines should help get the job done. However, the key to success will be supporting growth of the economy without ballooning the deficit and the debt.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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AOC accuses Vance of believing ‘American people should be assassinated in the street’

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AOC accuses Vance of believing ‘American people should be assassinated in the street’

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Democratic Rep. Alexandria Ocasio-Cortez is leveling a stunning accusation at Vice President JD Vance amid the national furor over this week’s fatal shooting in Minnesota involving an ICE agent.

“I understand that Vice President Vance believes that shooting a young mother of three in the face three times is an acceptable America that he wants to live in, and I do not,” the four-term federal lawmaker from New York and progressive champion argued as she answered questions on Friday on Capitol Hill from Fox News and other news organizations.

Ocasio-Cortez spoke in the wake of Wednesday’s shooting death of 37-year-old Renee Nicole Good after she confronted ICE agents from inside her car in Minneapolis.

RENEE NICOLE GOOD PART OF ‘ICE WATCH’ GROUP, DHS SOURCES SAY

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Members of law enforcement work the scene following a suspected shooting by an ICE agent during federal operations on January 7, 2026, in Minneapolis, Minnesota. (Stephen Maturen/Getty Images)

Video of the incident instantly went viral, and while Democrats have heavily criticized the shooting, the Trump administration is vocally defending the actions of the ICE agent.

HEAD HERE FOR LIVE FOX NEWS UPDATES ON THE ICE SHOOTING IN MINNESOTA

Vance, at a White House briefing on Thursday, charged that “this was an attack on federal law enforcement. This was an attack on law and order.”

“That woman was there to interfere with a legitimate law enforcement operation,” the vice president added. “The president stands with ICE, I stand with ICE, we stand with all of our law enforcement officers.”

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And Vance claimed Good was “brainwashed” and suggested she was connected to a “broader, left-wing network.”

Federal sources told Fox News on Friday that Good, who was a mother of three, worked as a Minneapolis-based immigration activist serving as a member of “ICE Watch.”

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Ocasio-Cortez, in responding to Vance’s comments, said, “That is a fundamental difference between Vice President Vance and I. I do not believe that the American people should be assassinated in the street.”

But a spokesperson for the vice president, responding to Ocasio-Cortez’s accusation, told Fox News Digital, “On National Law Enforcement Appreciation Day, AOC made it clear she thinks that radical leftists should be able to mow down ICE officials in broad daylight. She should be ashamed of herself. The Vice President stands with ICE and the brave men and women of law enforcement, and so do the American people.”

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Contributor: Don’t let the mobs rule

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Contributor: Don’t let the mobs rule

In Springfield, Ill., in 1838, a young Abraham Lincoln delivered a powerful speech decrying the “ravages of mob law” throughout the land. Lincoln warned, in eerily prescient fashion, that the spread of a then-ascendant “mobocratic spirit” threatened to sever the “attachment of the People” to their fellow countrymen and their nation. Lincoln’s opposition to anarchy of any kind was absolute and clarion: “There is no grievance that is a fit object of redress by mob law.”

Unfortunately, it seems that every few years, Americans must be reminded anew of Lincoln’s wisdom. This week’s lethal Immigration and Customs Enforcement standoff in the Twin Cities is but the latest instance of a years-long baleful trend.

On Wednesday, a 37-year-old stay-at-home mom, Renee Nicole Good, was fatally shot by an ICE agent in Minneapolis. Her ex-husband said she and her partner encountered ICE agents after dropping off Good’s 6-year-old at school. The federal government has called Good’s encounter “an act of domestic terrorism” and said the agent shot in self-defense.

Suffice it to say Minnesota’s Democratic establishment does not see it this way.

Minneapolis Mayor Jacob Frey responded to the deployment of 2,000 immigration agents in the area and the deadly encounter by telling ICE to “get the f— out” of Minnesota, while Gov. Tim Walz called the shooting “totally predictable” and “totally avoidable.” Frey, who was also mayor during the mayhem after George Floyd’s murder by city police in 2020, has lent succor to the anti-ICE provocateurs, seemingly encouraging them to make Good a Floyd-like martyr. As for Walz, he’s right that this tragedy was eminently “avoidable” — but not only for the reasons he thinks. If the Biden-Harris administration hadn’t allowed unvetted immigrants to remain in the country without legal status and if Walz’s administration hadn’t moved too slowly in its investigations of hundreds of Minnesotans — of mixed immigration status — defrauding taxpayers to the tune of billions of dollars, ICE never would have embarked on this particular operation.

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National Democrats took the rage even further. Following the fateful shooting, the Democratic Party’s official X feed promptly tweeted, without any morsel of nuance, that “ICE shot and killed a woman on camera.” This sort of irresponsible fear-mongering already may have prompted a crazed activist to shoot three detainees at an ICE facility in Dallas last September while targeting officers; similar dehumanizing rhetoric about the National Guard perhaps also played a role in November’s lethal shooting of a soldier in Washington, D.C.

Liberals and open-border activists play with fire when they so casually compare ICE, as Walz previously has, to a “modern-day Gestapo.” The fact is, ICE is not the Gestapo, Donald Trump is not Hitler, and Charlie Kirk was not a goose-stepping brownshirt. To pretend otherwise is to deprive words of meaning and to live in the theater of the absurd.

But as dangerous as this rhetoric is for officers and agents, it is the moral blackmail and “mobocratic spirit” of it all that is even more harmful to the rule of law.

The implicit threat of all “sanctuary” jurisdictions, whose resistance to aiding federal law enforcement smacks of John C. Calhoun-style antebellum “nullification,” is to tell the feds not to operate and enforce federal law in a certain area — or else. The result is crass lawlessness, Mafia-esque shakedown artistry and a fetid neo-confederate stench combined in one dystopian package.

The truth is that swaths of the activist left now engage in these sorts of threats as a matter of course. In 2020, the left’s months-long rioting following the death of Floyd led to upward of $2 billion in insurance claims. In 2021, they threatened the same rioting unless Derek Chauvin, the officer who infamously kneeled on Floyd’s neck, was found guilty of murder (which he was, twice). In 2022, following the unprecedented (and still unsolved) leak of the draft majority opinion in the Dobbs vs. Jackson Women’s Health Organization Supreme Court case, abortion-rights activists protested outside many of the right-leaning justices’ homes, perhaps hoping to induce them to change their minds and flip their votes. And now, ICE agents throughout the country face threats of violence — egged on by local Democratic leaders — simply for enforcing federal law.

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In “The Godfather,” Luca Brasi referred to this sort of thuggery as making someone an offer that he can’t refuse. We might also think of it as Lincoln’s dreaded “ravages of mob law.”

Regardless, a free republic cannot long endure like this. The rule of law cannot be held hostage to the histrionic temper tantrums of a radical ideological flank. The law must be enforced solemnly, without fear or favor. There can be no overarching blackmail lurking in the background — no Sword of Damocles hovering over the heads of a free people, ready to crash down on us all if a certain select few do not get their way.

The proper recourse for changing immigration law — or any federal law — is to lobby Congress to do so, or to make a case in federal court. The ginned-up martyrdom complex that leads some to take matters into their own hands is a recipe for personal and national ruination. There is nothing good down that road — only death, despair and mobocracy.

Josh Hammer’s latest book is “Israel and Civilization: The Fate of the Jewish Nation and the Destiny of the West.” This article was produced in collaboration with Creators Syndicate. X: @josh_hammer

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Ideas expressed in the piece

  • Democrats and activist left are perpetuating a dangerous “mobocratic spirit” similar to the mob law that Lincoln warned against in 1838, which threatens the rule of law and national unity[1]
  • The federal government’s characterization of the incident as self-defense by an ICE agent is appropriate, while local Democratic leaders are irresponsibly encouraging anti-ICE protesters to view Good as a martyr figure like George Floyd[1]
  • Dehumanizing rhetoric comparing ICE to the Gestapo is reckless fear-mongering that has inspired actual violence, including a shooting at an ICE facility in Dallas and the fatal shooting of a National Guard soldier[1]
  • The shooting was “avoidable” not because of ICE’s presence, but because the Biden-Harris administration allowed undocumented immigrants to remain in the country without legal status and state authorities moved too slowly investigating immigrant fraud[1]
  • Sanctuary jurisdictions that resist federal law enforcement represent neo-confederate “nullification” and constitute crass lawlessness and Mafia-style extortion, effectively telling federal agents they cannot enforce the law or face consequences[1]
  • The activist left employs threats of violence as systematic blackmail, evidenced by 2020 riots following Floyd’s death, threats surrounding the Chauvin trial, protests at justices’ homes during the abortion debate, and now threats against ICE agents[1]
  • Changing immigration policy must occur through Congress or federal courts, not through mob rule and “ginned-up martyrdom complexes” that lead to personal and national ruination[1]

Different views on the topic

  • Community members who knew Good rejected characterizations of her as a domestic terrorist, with her mother describing her as “one of the kindest people I’ve ever known,” “extremely compassionate,” and someone “who has taken care of people all her life”[1]
  • Vigil speakers and attendees portrayed Good as peacefully present to watch the situation and protect her neighbors, with an organizer stating “She was peaceful; she did the right thing” and “She died because she loved her neighbors”[1]
  • A speaker identified only as Noah explicitly rejected the federal government’s domestic terrorism characterization, saying Good was present “to watch the terrorists,” not participate in terrorism[1]
  • Neighbors described Good as a loving mother and warm family member who was an award-winning poet and positive community presence, suggesting her presence during the incident reflected civic concern rather than radicalism[1]
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Trump plans to meet with Venezuela opposition leader Maria Corina Machado next week

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Trump plans to meet with Venezuela opposition leader Maria Corina Machado next week

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President Donald Trump said on Thursday that he plans to meet with Venezuelan opposition leader Maria Corina Machado in Washington next week.

During an appearance on Fox News’ “Hannity,” Trump was asked if he intends to meet with Machado after the U.S. struck Venezuela and captured its president, Nicolás Maduro.

“Well, I understand she’s coming in next week sometime, and I look forward to saying hello to her,” Trump said.

Venezuelan opposition leader Maria Corina Machado waves a national flag during a protest called by the opposition on the eve of the presidential inauguration, in Caracas on January 9, 2025. (JUAN BARRETO/AFP via Getty Images)

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This will be Trump’s first meeting with Machado, who the U.S. president stated “doesn’t have the support within or the respect within the country” to lead.

According to reports, Trump’s refusal to support Machado was linked to her accepting the 2025 Nobel Peace Prize, which Trump believed he deserved.

But Trump later told NBC News that while he believed Machado should not have won the award, her acceptance of the prize had “nothing to do with my decision” about the prospect of her leading Venezuela.

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