A growing faction of President-elect Donald Trump’s allies are expressing concerns over the Republican Party’s ability to pass a major tax reform bill in 2025, citing internal party divisions and conflicting strategies. With limited time left before a potential tax increase at year’s end, GOP lawmakers face mounting pressure to act quickly, but fundamental disagreements over the legislative approach threaten to derail the effort.
Republicans agree that enacting sweeping tax changes is a rare opportunity to reshape the nation’s tax code without Democratic concessions. However, they face an impending deadline: if Congress fails to pass tax reform by the end of 2025, households and privately-held businesses will see their tax bills rise. Despite this urgency, Republicans are divided over how best to meet the deadline.
Trump’s meeting with GOP senators on Wednesday evening yielded little progress, with the president-elect expressing indifference about the strategy his allies pursue. “It doesn’t matter to me how they get it done, as long as they get it done,” Trump told reporters after the meeting.
One key point of contention is the sequencing of legislative priorities. Stephen Miller, Trump’s incoming deputy White House chief of staff and a staunch advocate for immigration reform, has urged Congress to first address border security before pivoting to tax reform. This approach received backing from Senate Majority Leader John Thune, who made the case during the opening of the new Congress.
On the other hand, many House Republicans argue for bundling immigration reform, energy production, and tax cuts into one single, comprehensive bill. This tactic reflects the fractured nature of the House GOP, where infighting among members often complicates even the simplest legislative efforts. House Ways and Means Chairman Jason Smith has made clear that the best chance of passing a tax cut package through the House is to include it in the initial bill. “The sooner we can pass it, the better,” he said, referring to the reconciliation process that allows the majority party to pass bills with a simple majority vote, bypassing the need for Democratic support.
Complicating matters further, Trump has wavered in his stance on whether to separate the issues. Over the weekend, he called for a single, sweeping bill that would address all his key priorities, but by Tuesday, he expressed openness to the idea of dividing the issues, potentially moving immigration reform forward first. “I like one big beautiful bill. I always have. But if two bills are more certain and quicker, that’s fine too,” Trump remarked, signaling his flexibility.
Adding to the complexity, Senator Rand Paul (R-Ky.) suggested that the tax cuts could be offset by increased tariffs, a proposal that could further fracture GOP unity. Thune, after meeting with House Speaker Mike Johnson on Tuesday, joked that the legislative strategy for the upcoming tax bill was “as clear as mud.” Despite the lack of clarity on how to proceed, Thune emphasized that Republicans remain united on the overall goal, though their methods differ.
Republicans are also facing the looming issue of raising the debt ceiling, a challenge that has historically caused infighting within the party. Speaker Johnson has indicated that he plans to include a debt ceiling increase in the tax reform bill, with hopes to finalize it by April. However, some Republicans are opposed to mixing the two issues, fearing that it could further complicate the legislative process.
Several key figures, including Trump’s economic advisers, are urging a quick focus on tax reform. Steve Moore, a former economic adviser to Trump, along with former National Economic Council Chair Larry Kudlow and economist Arthur Laffer, have pushed for addressing taxes within the first 150 days of the new administration to avoid risking the political capital needed for a major tax cut package.
Business leaders, too, are stressing the importance of swift action. Jay Timmons, CEO of the National Association of Manufacturers, warned that a delay in passing tax reform could derail the economic growth the GOP promised to deliver. “From a business perspective, sooner is going to be a whole lot better than later if they want to keep their promises,” Timmons said.
Yet some Republicans are wary of moving too quickly on immigration, fearing that a single, comprehensive bill could consume far more time and political energy than anticipated. This could sap momentum for tax reform and jeopardize the scope and ambition of the tax cuts themselves.
A lesson from history looms large: In 2017, Trump’s attempt to repeal the Affordable Care Act (ACA) consumed much of his early presidency, ultimately leading to failure. Despite this, Republicans did manage to pass tax reform in December of that year, though it was done with only Republican support and without any Democratic buy-in. At the time, many Trump allies believed that prioritizing tax reform first, rather than healthcare, would have yielded greater political rewards.
As Trump prepares for his second term, he is pledging to extend the 2017 tax cuts, expand state and local tax deductions, and introduce new tax breaks, including exemptions for tips, overtime pay, and Social Security checks. Some of these promises, particularly the no-taxes-on-tips proposal, are expected to be top priorities for the incoming administration.
For Republicans, the political stakes are high: delivering on Trump’s tax promises is seen as key to holding onto control of the House of Representatives in the 2026 elections. Former House Speaker Newt Gingrich, a close Trump ally, has pointed to historical precedents, citing Reagan’s failure to front-load tax cuts as a factor in the GOP’s loss of seats in 1982. Similarly, Trump’s delay in passing tax reform in 2018 contributed to Republican losses that year.
Former Representative Kevin Brady, who played a central role in passing the 2017 tax overhaul, urged Republicans to prioritize tax reform at all costs. “Failure is not an option,” Brady said at a recent event in Washington. “You cannot wreck this economy. You cannot damage this presidency. You’re going to find a way to get this done.”
As the GOP leadership works to navigate these internal divides, the clock is ticking, and the stakes for both Trump and the party have never been higher.
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