US sees 6 million lost jobs, $1.1T GDP shortfall if Trump tax cuts expire: study

FIRST on FOX. A study released by the National Association of Manufacturers (NAM) shows that nearly 6 million American jobs are at risk if President-elect Trump’s 2017 tax cuts expire.

Fox News Digital first obtained a copy of the study conducted by Ernst & Young on behalf of the major company. production unit In the US, it found that if Congress does not act to preserve the Tax Cuts and Jobs Act by the end of 2025, about 5.9 million Americans will lose their jobs.

NAM argued that key manufacturing provisions related to research and development, capital investment, and business credits in the Tax Cuts and Jobs Act of 2017 had already been removed in 2022 and 2023, and several other provisions, particularly the 20% carryover deduction, individual The tax rates and the property tax exemption threshold are expected to expire by the end of 2025.

The study estimates that: The US economy If the remaining provisions of the Tax Cuts and Jobs Act expire, there will be $540 billion in lost wages and a $1.089 trillion shortfall in GDP. In addition, if Congress does not preserve the reforms, 1.137 million manufacturing jobs, $126 billion in manufacturing worker compensation and $284 billion in manufacturing GDP is on the line, the study said.

“The time to act is now. Millions of American workers depend on the manufacturing sector to keep America moving,” said NAM President and CEO Jay Timmons. “President Trump’s pro-growth tax policies were rocket fuel for manufacturers.” for and made the US economy more globally competitive.Manufacturers did our part to create jobs, raise wages and benefits, and invest in our community By acting now, policymakers can choose economic growth over economic disaster and protect American livelihoods.”

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President-elect Donald Trump speaks to members of the media during a news conference at Mar-a-Lago on January 7, 2025 in Palm Beach, Florida. (Scott Olson/Getty Images)

Timmons argued that preserving tax reform should be one of the priorities of the new Congress and the incoming Trump administration.

“If Congress delays, manufacturers will have to delay investment and job creation decisions because of the uncertain outlook. In 2017, Congress passed the Tax Cuts and Jobs Act, which means that manufacturers’ investment decisions based on the law may not bear fruit by 2018 at the latest,” Timmons said.

Industrial capital spending grew by 4.5% and 5.7% in 2018 and 2019, respectively, compared to just 1.4% growth in 2017.

Timmons noted how manufacturers added 267,000 new jobs in 2018, the best year for manufacturing job creation in 21 years.

“This time we cannot afford to wait. In recent years, important provisions of the TCJA have expired, the economy is already in decline,” he said. , and China’s R&D growth has tripled our growth. Congress and President Trump must act quickly to boost activity this year by giving manufacturers the tax certainty they need to plan for the long term for job-creating projects.”

NAM argues that congressional inaction risks higher taxes on pass-through businesses and family-owned companies; Increase in R&D, capital equipment purchases and business loan costs; and “an uncompetitive international tax regime that undermines investment in the United States and hinders manufacturers’ ability to compete on the global stage.”

The Republican leadership of the House of Representatives has signaled that they are in favor of keeping the 2017 tax reform.

Mike Johnson, who is in the U.S., speaks on the first day of the 119th Congress after being re-elected Speaker of the House of Representatives on January 3, 2025. (Chip Somodevilla/Getty Images)

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“Failure to extend Trump’s tax cuts could result in nearly 6 million job losses and the destruction of America’s manufacturing sector,” House Speaker Mike Johnson said in a statement. We all know the importance of this. making things here in AmericaSo House Republicans are working hard to preserve and build on President Trump’s historic tax reform and support American manufacturers.”

House Majority Leader Steve Scalise, Republican, said Trump’s 2017 Tax Cuts and Jobs Act “not only boosted American manufacturing, but spurred job growth, spurred innovation, raised wages for hard-working Americans, and enhanced U.S. competitiveness.”

“With President Trump’s return to the White House and Republican majority In the House and Senate, we must act quickly to ensure we maintain global competitiveness, support investment and innovation, and protect small businesses and workers,” Scalise added. “Working Americans deserve a strong economy that works for them, not for them against them. House Republicans are poised to prevent the largest tax hike in history and make our economy great again.”

NAM President and CEO Jay Timmons (Andrew Harer/Bloomberg via Getty Images/File)

“This study confirms the need to immediately extend the Trump tax cuts this year, showing the real-world devastation to American small businesses and manufacturers if we fail to act,” said House Ways and Means Committee Chairman Jason Smith if available, Congress must act quickly to give America’s small businesses, families and communities the green light to hire more workers and expand their businesses across the country to get the biggest economy of our lives back on track as soon as possible. “.

“The last thing they need is the largest tax increase in American history,” Smith added. “Ways and Means Republicans have been preparing for nearly two years at this point and are ready to deliver an economic package that will make American manufacturing great again.”

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The study also prompted reactions from the upper house of Congress, Senate Finance Committee Chairman Mike Crapo, R-Idaho, said Trump’s tax reform “allowed Americans to keep more of their hard-earned money and allowed businesses to invest in their ideas, products and people.” He added that making those tax cuts permanent “is the best way to ensure the greatest economic growth , to provide certainty and stability for American businesses and to avoid the economic losses described in this study.”

A news conference is scheduled for Tuesday afternoon at the Capitol to further discuss the study.