Economist Stephen Moore joined Dan Proft and guest host John Kass on Chicago’s Morning Answer Thursday morning to break down the House’s razor-thin passage of a sweeping Republican tax bill. Calling it a “big, beautiful step” toward tax relief and economic stability, Moore emphasized the significance of the victory — even if the legislation falls short of perfection.
Passed by a single vote, the House GOP’s tax package includes extensions of Trump-era tax cuts, new deductions, phased spending cuts, and border and defense funding increases. But Moore admitted it’s a mixed bag, loaded with last-minute provisions and political concessions — not the least of which is the controversial expansion of the SALT (State and Local Tax) deduction to $40,000, a demand from blue-state Republicans like Rep. Mike Lawler of New York.
“This is a big win, no question,” Moore said. “But the SALT deduction? That’s a bailout for rich people in high-tax states. There’s no good policy reason to let people deduct state taxes from their federal tax liability. It just rewards places like Illinois and New York for their fiscal recklessness.”
Moore praised House Speaker Mike Johnson for delivering the bill despite a fractious GOP conference and little room for error. “Herding those cats was brutal,” he said. “But Johnson got it done.”
The Senate is expected to take up the bill in the coming weeks, and Moore is optimistic the upper chamber may improve it — especially by trimming the SALT deduction and potentially expanding tax rate cuts.
Moore criticized the lack of more aggressive spending reforms and tax cuts in the current version, noting that while the bill avoids a massive tax increase scheduled for next year, it doesn’t do much to stimulate growth.
“This doesn’t really cut taxes — it just prevents a big hike,” Moore noted. “We’re still looking at $85 trillion in spending over the next decade. That’s only slightly lower than the $87 trillion projected without this bill.”
When asked about market jitters following a weak auction of 20-year Treasury bonds, Moore warned of the long-term consequences of growing deficits. But he pointed out that tax stability, particularly for the middle class, was essential to keep the economy on track.
Moore also suggested a bold vision for the next phase of tax reform: eliminate all itemized deductions and use the savings to cut tax rates across the board by 20 percent.
“Ninety percent of Americans don’t itemize anymore,” Moore said. “Let’s simplify the code. Eliminate deductions, flatten the rates, and put the Democrats in the awkward position of defending loopholes for millionaires.”
Proft asked about former President Donald Trump’s role in pushing the legislation across the finish line. Moore credited Trump with personally twisting arms and aligning the party behind the bill.
“This is Trump’s party now,” Moore said. “He took a hands-on approach to getting this done. He deserves a victory lap — this bill is part of his legacy.”
However, Moore emphasized that a forward-looking economic vision is still needed. While this bill prevents backsliding, real growth and prosperity require deeper structural reforms — reforms he hopes the next Congress will be better positioned to deliver.
“Next, we need leadership to focus on capital investment, productivity, and risk-taking,” Moore said. “This is a good first step — but there’s a lot more work to do.”
As the bill heads to the Senate, the focus now turns to how much of the House version survives — and whether Republican lawmakers can build on this legislative win to set the stage for more substantial tax reform in 2025.