Before the coronavirus pandemic, the American economy was healthy and growing. Today, the outlook is much different — reckless Washington spending and heavy-handed unilateral shutdowns have resulted in historic inflation and economic hardships not seen in four decades.
People are finding it more difficult to put food on their tables. Grocery prices increased nearly 12% from May 2021 to May 2022 — the largest 12-month increase since 1979, according to the U.S. Labor Department’s Consumer Price Index. The cost of meats, poultry and fish increased 14.2%, dairy products rose by 11.8% and the price of eggs jumped 32.2%.
Household budgets are also being squeezed at the gas pump, where prices reach record heights on a near daily basis. According to AAA, the average per gallon price for regular gasoline in Michigan was $5.22 on June 11 and the average diesel price on June 22 was $5.96. Both prices are the highest recorded average prices in state history.
This disastrous course must be reversed. That is why I recently introduced Senate Resolution 154 to urge Congress to permanently extend the Tax Cuts and Jobs Act of 2017. This necessary action will avert crippling tax increases and work to help taxpayers recover from current economic hardships.
The 2017 tax cuts reduced federal tax rates for households across every income level. Before the TCJA, the top corporate income tax rate in the U.S. was 35%, one of the highest among all nations in the Organization for Economic Cooperation and Development; the law reduced the business tax rate to 21%, bringing the U.S. back into the average among member nations, and dramatically enhancing American competitiveness.
In addition to these growth-inducing tax cuts, the federal tax base was broadened by capping the state and local tax deduction at $10,000 annually. Prior to the cap, this deduction was unlimited and incentivized states with high taxes to continue irresponsible tax and spend policies with the poor excuse it provided tax cuts for residents at the federal level.
It left taxpayers in lower-tax states like Michigan to pick up the tab at the federal level for states like New York, California and Illinois.
Many of the most significant TCJA provisions are set to expire by Dec. 31, 2025. Allowing these tax cuts to expire would result in a huge federal tax increase on the American people and further inhibit the recovery of our shared economy.
History shows us that the American people know how to spend their own money far better than the government and our whole nation prospers when they have the freedom to do so.
Permanently extending the TCJA and reducing irresponsible federal spending will help give confidence to taxpayers to invest in their own futures and rebuild a booming American economy.
This op-ed appeared in the June 25, 2022 edition of The Detroit News. State Sen. Jim Runestad, R-White Lake, represents Michigan’s 15th District.