As former U.S. President Donald Trump and congressional Republicans campaign on extending their 2017 tax cuts if elected in November, a government analysis revealed Wednesday that doing so would add $4.6 trillion to the national deficit.
When Trump signed the Tax Cuts and Jobs Act during his first term, the initial estimated cost was $1.9 trillion. Last year, the Congressional Budget Office (CBO) projected that extending policies set to expire next year would cost $3.5 trillion through 2033.
The new CBO report—sought by U.S. Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.) and Senate Finance Committee Chair Ron Wyden (D-Ore.)—says continuing the income, business, and estate tax cuts will now cost $4.6 trillion through 2034.
"The Republican tax plan is to double down on Trump's handouts to corporations and the wealthy, run the deficit into the stratosphere, and make it impossible to save Medicare and Social Security or help families with the cost of living in America."
Responding in a statement Wednesday, the senators cited an Institute on Taxation and Economic Policy (ITEP) estimate that "extending the Trump tax cuts would create a $112.6 billion windfall for the top 5% of income earners in the first year alone."
They also slammed their GOP colleagues, who Whitehouse said "are awfully eager to shield their megadonors from paying taxes."
He recalled that just last year, "Republicans held our entire economy hostage," refusing to raise the debt ceiling and risking the first-ever U.S. default, because they didn't want the Internal Revenue Service to get more funding to "go after wealthy tax cheats."
"Remember the Trump tax scam cutting taxes for billionaires and big corporations," Whitehouse continued. "Now they're set on extending those tax cuts, even though it would blow up the deficit. The Trump tax cuts were a gift to the ultrarich and a rotten deal for American families and small businesses. With their impending expiration, we have a chance to undo the damage, fix our corrupted tax code, and have big corporations and the ultrawealthy begin to pay their fair share."
Wyden similarly took aim at the GOP, warning that "the Republican tax plan is to double down on Trump's handouts to corporations and the wealthy, run the deficit into the stratosphere, and make it impossible to save Medicare and Social Security or help families with the cost of living in America."
"Republicans have planned all along on making Trump's tax handouts to the rich permanent, but they hid the true cost with timing gimmicks and a 2025 deadline that threatens the middle class with an automatic tax hike if they don't get what they want," he argued. "In short, they're focused on helping the rich get richer, and everybody else can go pound sand. Democrats are going to stand by our commitment to protect the middle class while ensuring that corporations and the wealthy pay a fair share."
Groundwork Collaborative executive director Lindsay Owens also responded critically to the CBO report, saying Wednesday that "extending Trump's tax law and effectively subsidizing corporate profiteering and billionaire wealth is a nonstarter."
"This tax law, on top of decades of failed trickle-down cuts, has come at the expense of workers and families," Owens stressed. "We can't afford 10 more years of giveaways to the wealthy and corporations and fail to invest in the people who drive our economy. This tax law should expire."
While some of the tax cuts in the 2017 law are temporary—unless they get extended—the legislation permanently slashed the statutory corporate tax rate from 35% to 21%. As Common Dreamsreported last week, a new ITEP analysis shows that tax rates paid by big and consistently profitable corporations dropped from 22% to 12.8% after the law's enactment.
