There’s No Such Thing as a Free Tax Cut

In Budget, Taxes On

Legend has it that the British economist John Maynard Keynes, asked why he had changed his position on a question of economic policy, responded: “When the facts change, I change my mind. What do you do, sir?”

Treasury Secretary Steven Mnuchin has embraced a different approach: ignoring the facts.

This week, Mr. Mnuchin repeated the risible fantasy that the Trump administration’s 2017 tax cuts will bolster economic growth sufficiently for the government to recoup the revenue it has lost by lowering tax rates.

“I’ll stick with my projections that the tax deal will pay for itself,” he said from Switzerland.

The claim that tax cuts don’t cost money is a lie that won’t die, because proponents of tax cuts have learned that many voters like to hear it. Republicans have steadily insisted for almost four decades that tax cuts are free, even as each new round of tax cuts fails to pay for itself. Mr. Mnuchin and other proponents of the most recent tax cuts were already peddling a delusion when they made the claim in 2017.

Two years later, the results are in. The annual federal budget deficit has topped $1 trillion. And it is even more difficult to understand how anyone could make such a claim.

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