Higher taxes and fewer jobs are not a recipe for economic growth. New Englanders will get both if Congress fails to extend the TCJA.
Letting the cuts expire would be devastating, especially to New England. A tax hike would shrink the economy, reduce revenue potential, and leave families and businesses worse off.
M ore than 250 years after the Boston Tea Party, New Englanders are once again pushing back against punishing taxation — only this time, the fight is in the halls of Congress, not the Boston Harbor.
On March 25, Americans for Prosperity and New England think tanks joined together for a press conference to send a clear message to U.S. Congress lawmakers: extend the 2017 Tax Cuts and Jobs Act (TCJA), also known as the “Trump Tax Cuts,” otherwise the region will suffer serious economic consequences.
Their plea is not without reason. With TCJA set to expire by year’s end, New England residents — who already endure some of the worst tax climates in the nation — would be hit with a higher average federal tax hike than anywhere across the country and lose thousands of jobs.
Prior to the pandemic, the U.S. economy benefited from the TCJA tax cuts. Five million new jobs were added, and the unemployment rate fell to 3.5 percent — the lowest since 1969. Additionally, a family of four saved $1,500 per year, the median income reached an all-time high, and 870,000 Americans received an immediate bonus of $1,000 or more.
However, since January 2021, inflation has taken a significant toll on households nationwide, driven by the Biden administration’s spending that not only added $5 trillion to our now $36 trillion national debt, but devalued the U.S. dollar by nearly 25 percent. For New England states, inflation’s effects have been steep — the average family has faced an additional $1,015 in monthly costs.
If the TCJA expires, the financial strain on New England’s families would be compounded by thousands of dollars. Massachusetts families would bear the highest burden, with the average federal tax bill rising $4,656. The other states, however, would not fair much better. Families in New Hampshire ($3,472), Connecticut ($3,339), Rhode Island ($2,361), Vermont ($2,138), and Maine ($2,129) can all expect significant increases. Higher tax bills would erode valuable disposable income, leaving families with even less to spend on essentials like housing, groceries, and education — especially as inflation continues to squeeze budgets.
Moreover, New England businesses would also see their average tax bill rise by hundreds or even thousands of dollars — $910 in Maine, $1,000 in Rhode Island, $1,078 in Vermont, $1,544 in New Hampshire, $1,973 in Connecticut, and $2,031 in Massachusetts. Worse, a lapse in extending the TCJA could cost New England more than 55,000 jobs, with Massachusetts estimated to lose the most at 28,887.
Higher taxes and fewer jobs are not a recipe for economic growth. New Englanders will get both if Congress fails to extend the TCJA.
However, the devastating economic ramifications which would follow TCJA’s expiration have not yet moved Congress to act. Despite President Donald Trump’s call for a “big, beautiful” tax bill and Republican majorities in both the House and Senate, the TCJA’s extension is not a guarantee. Currently, congressional Republican leaders are negotiating how to make the TCJA permanent by mid-April.
Democrats have criticized the tax cuts for benefiting the wealthiest Americans and ballooning the deficit, which, if made permanent, would decrease revenue by $4 trillion from 2025-2034. Meanwhile, some Republican lawmakers are reluctant to increase the deficit without a significant reduction in federal spending to offset the decreased revenue stream.
These criticisms, however, ignore that tax cuts aren’t the cause of deficits — spending is. They also neglect TCJA’s benefits, which increase when coupled with reduced expenditures.
The Congressional Budget Office projects that the gross domestic product (GDP) will be $12 trillion higher than expected and private investment is estimated to exceed pre-TCJA projections by $4 trillion. Meanwhile, when comparing congressional projections from before and after the TCJA, federal tax revenues are anticipated to be nearly $620 billion higher than pre-TCJA estimates. And, through the first ten years, revenues will be $2.7 trillion higher than projected after the passage of the TCJA. According to the Tax Foundation, permanently extending the TCJA would “boost long-run economic output” by creating 847,000 full-time jobs.
Americans not only need tax relief — they want tax relief. According to a Public Opinion Strategies survey, 76 percent of voters, regardless of political affiliation, say now is a bad time for tax increases. Indeed, 90 percent of voters also want to keep the current tax rates, and view TCJA’s lapse as a tax increase.
Extending the TCJA isn’t just sound policy — it’s a moral imperative to support the American people when they need it most. The alternative — letting the cuts expire — would be devastating, especially to New England. Now is the time to cement the “golden age” President Trump envisioned during his inaugural address, rather than shrink the economy, reduce revenue potential, and leave families and businesses worse off.