Yellen and Republicans Spar Over Tax Cuts

What You Need to Know

The Treasury chief says Biden wants revenue-raising measures to cover cuts in place for those earning under $400,000.
The administration has also proposed raising revenue through new taxes on people with $100 million-plus in wealth.
Republicans say boosting taxes on the wealthy and corporations will sap revenues by acting as a drag on economic growth.

Treasury Secretary Janet Yellen came under fire from Republican lawmakers Tuesday over a quip from President Joe Biden about letting tax cuts enacted by predecessor Donald Trump expire.

Yellen repeatedly emphasized that the adminstration’s principles on tax policy had not changed, and that Biden supports retaining tax reductions for families earning less than $400,000.

The exchanges underscore how heated the fight is likely to be next year as the expiration date approaches for individual rate reductions championed by Trump in a 2017 package.

Biden in remarks on April 19, and again in an April 23 posting on X, formerly known as Twitter, said he would let the Trump tax package expire, saying it had “overwhelmingly benefited the wealthy and big corporations.”

While he has long said he would seek to renew cuts for households making less than $400,000 a year, while letting the rest expire at the end of 2025, he didn’t use that language in the remarks earlier this month.

Multiple Republicans on the House panel seized on that discrepancy, and pressed Yellen on Biden’s tax policy. Representative Ron Estes of Kansas said, “If this tweet is right, that came from President Biden, he is going to increase taxes on people making less than $400,000.”

Testy Exchange

Yellen refuted that, saying the administration’s policy had not changed.

“President Biden has repeatedly issued a set of principles that will guide his negotiations, and he has repeatedly said he will not support increases on families making under $400,000,” she said.

While he hasn’t “offered a detailed plan on how to make sure” that happens, “he’s made clear he stands ready to work with Congress” on it, she said.

A handful of other Republicans also raised the issue, including Minnesota’s Michelle Fischbach. Biden “told the American people flat out that he intends to let the Trump tax cuts expire and remain expired,” she said.