Steve Bannon issued a warning to President Donald Trump against extending tax cuts for the wealthy.
Newsweek reached out to the White House for comment via email on Thursday.
Why It Matters
The economy remains one of the most important issues for voters, who have dealt with years of high inflation after the COVID-19 pandemic. On the campaign trail, Trump emphasized the economy and his plans to tackle inflation, but economists warn that some of Trump’s policies like tariffs may trigger higher prices for U.S. consumers.
What To Know
Trump and congressional Republicans are eyeing several tax cuts as part of his second-term economic policy, but Bannon, a former Trump adviser, warned in a Gettr post on Thursday that the cuts would not be enough to tackle U.S. economic challenges.
He warned tax cuts alone would worsen the national deficit, which stands at more than $1.3 trillion, according to the U.S. Department of the Treasury, in a response to a Slate article reporting that Republicans not extending tax cuts to the wealthy “started as almost a joke.”
Bannon, however, wrote that the idea “Most Certainly Did NOT Start as a Joke.”
“No Tax on Tips , No Tax on Overtime, No Tax on Social Security—without Massive Spending Cuts or Dramatic Growth the Math DICTATES that you CANNOT Extend the Tax Cuts to the Upper Bracket without Driving an Even Bigger Deficit…” Bannon posted.
Bannon is a key Trump supporter who has even floated a potential third term for the president, though the U.S. Constitution would bar him from running again.
His comments come amid speculation that some tax cuts for the wealthy may not be extended in Trump’s new tax cuts.
Senator Kevin Cramer, a North Dakota Republican, told NBC News that there has been talk of higher tax rates for the wealthy, but it’s unclear whether a majority of Republicans would be on board.
“It’s just so fun to be a Republican these days, just to watch the transformation, where suddenly people are going—when you think about it, why do we worry so much about that?” Cramer told the outlet. “So whether it’s allowing them to go up a little bit or even lowering some of the other stuff more—there’s a populism growing in the party, even among those of us with powdered wigs.”
Treasury Secretary Scott Bessent declined to rule out the possibility of tax cuts not being extended for wealthy Americans in an interview with Bloomberg. But Punchbowl News reported that House Majority Leader Steve Scalise responded to the idea by saying “No. No. No.”
On the campaign trail, Trump emphasized policies like not requiring taxes on tips, aimed at benefiting more working-class Americans. Critics have long accused the GOP of prioritizing tax cuts for the rich at the expense of others in need of economic relief.
Bannon, who has called for more focus to tackle the deficit, said during an episode of his War Room podcast last year that the billionaire class would have to make sacrifices to help the U.S. avert a financial crisis.
“The deficit in the United States is now above 60 percent of GDP,” Bannon said. “It’s unsustainable. Right now, we’re running deficits of $1.5 to $2 trillion a year. We’ve been warning for years that this was not sustainable, and now, in late 2024 and early 2025, it’s coming home to roost.”
What People Are Saying
The White House, in a statement this month: “If Congress doesn’t extend the Trump Tax Cuts, Americans will be stuck with the largest tax hike in history.”
Bobby Kogan, senior director of federal budget policy for the Center for American Progress, wrote: “In fact, the Center for American Progress finds that the loss in earnings would eventually more than fully cancel out any financial gain from a tax cut for American households on average, leaving them worse off than if the tax cuts were allowed to expire on schedule. In other words, this plan would lower after-tax income in the long run, reducing income more than it would reduce taxes.”
What Happens Next
Many of Trump’s tax cuts are set to expire at the end of the year if Congress does not opt to renew them. Republicans control both the House of Representatives and Senate, so they would not need Democratic support if they attach the tax cuts to reconciliation.
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