Nonpartisan scorekeeper: Trump’s tax cuts for the rich would not bring economic growth
Extending the 2017 Tax Cuts and Jobs Act will add $4.6 trillion to the national debt but shrink the economy slightly in the long term.
The nonpartisan Congressional Budget Office found that extending the expiring provisions of President Donald Trump’s 2017 Tax Cuts and Jobs Act would shrink the economy and add $4.6 trillion to the national debt.
The law slashed tax rates for large corporations and wealthy individuals. While the corporate tax rate changes were permanent, most of the provisions relating to individuals are set to expire in 2025. Trump and many Republicans in Congress have vowed to extend those provisions and make them permanent.
“Republicans will make permanent the provisions of the Trump Tax Cuts and Jobs Act that doubled the standard deduction, expanded the Child Tax Credit, and spurred Economic Growth for all Americans,” the Republican National Committee said in its 2024 platform.
The CBO analysis released Dec. 4 said that allowing the expiring tax provisions to expire would result in “very small changes to gross domestic product,” due to a slight drop in the labor supply but an increase in private investment fueled by lower federal borrowing. By 2034, real GDP would actually increase, on net, by slightly less than 0.1% without the expiring portions of the law.
Trump ran in 2016 on promises to cut tax rates for the middle class by more than a third and to completely get rid of the national debt. Instead 10 million families saw their tax bills go up and the national debt increased by about $8 trillion in his first term.
“Far from unleashing record-breaking growth, the next Trump tax scam will make hardworking families worse off, shrink our economy, and blow a $4.6 trillion hole in the deficit,” Senate Budget Committee Chair Sheldon Whitehouse (D-RI) said in a Dec. 4 statement. “What a racket, to push for trillions in tax cuts so billionaires keep paying lower rates than nurses and plumbers, and then cite deficit concerns to rob families needing things like home heating or child care. Looting the treasury for megadonors is a rotten trick, and no amount of budgetary smoke and mirrors will hide it.”
In a Dec. 4 appearance on Fox Business, Wisconsin Republican Sen. Ron Johnson said, “Internally, what I’ve been pushing for is our top priority must be to prevent a massive tax increase from starting in 2026. We have to forestall that.”
In the current Congress, 105 House Republicans proposed the TCJA Permanency Act to make the individual tax rates permanent. These included Wisconsin Reps. Scott Fitzgerald, Glenn Grothman, and Bryan Steil.
Grothman voted for a similar bill in 2018, which passed in the House and died in the Senate.
