Happy Birthday, GOP Tax Cuts. Welcome To Your Terrible Twos.
Welcome to your terrible twos, GOP tax cuts!
Sunday will mark the second birthday of President Trump’s signature legislative achievement: a nearly $2 trillion, deficit-financed tax cut weighted toward corporations and the wealthy. Unfortunately, on this birthday — like the first one — our toddler is way behind on nearly all its developmental milestones.
Americans were promised, for instance, that the tax cuts wouldn’t add a penny to federal deficits. In fact, they would more than pay for themselves, reducing government debt.
In the fiscal year that recently ended, the deficit once again widened, to nearly $1 trillion. That is 26 percent higher than the deficit in fiscal 2018 and an astounding 48 percent higher relative to 2017, the last full year before the tax cuts were in place.
Yes, the deficit went up partly because spending did. But it has also increased because tax revenue isn’t coming in nearly as strongly as you’d expect during an economic expansion. In fact, thanks to Trump’s tax overhaul, corporate tax revenue is down more than a fifth since fiscal 2017. The Congressional Budget Office has predicted that the legislation overall will end up adding nearly $2 trillion in red ink over a decade.
As you may recall, the tax law’s boosters promised it would pay for itself by supercharging the economy. Just two weeks before signing the bill, Trump foresaw “6 percent growth.” If true, that would have been quite an achievement — roughly triple what independent forecasters predicted for the upcoming decade.
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