We should all remember the following as the election rhetoric heats up and the promises start to flow.
Tax Cut Extensions Cost Over $3.3 Trillion
AUG 14, 2023
Some parts of the 2017 Tax Cuts and Jobs Act (TCJA) have recently expired or changed, and large portions of the TCJA will expire by the end of calendar year 2025. Extending these provisions without offsets would dramatically worsen the fiscal situation. Based largely on recent projections from the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) this piece shows:
- Extending the TCJA in full would cost over $3.3 trillion through 2033, or $3.8 trillion with interest.
- Extensions would boost debt to 125 percent of GDP by 2033, from 115 percent under current law.
- Extensions would boost deficits above 8 percent of GDP in 2033, from 6.8 percent under current law.
- Extending individual provisions that expire at the end of 2025 would cost $3.4 trillion through 2035.
Given the tremendous cost of extending these tax cuts, lawmakers should carefully consider which provisions are worth extending, which should be modified, and which should be allowed to expire as scheduled. Lawmakers should also ensure that any extensions are fully paid for in the context of a plan to reduce, or at least not add to, the debt. To assist in this process, the Committee for a Responsible Federal Budget is developing a Build Your Own Tax Extensions interactive tool. A beta version of the tool can be downloaded here.
Committee for a Responsible Federal Budget
QUINNSCOMMENTARY 
I keep hearing how the tax cuts of the past created this giant deficit. To me the answer is spending cuts. You always say in your financial advice to live within your means. Shouldn’t that go for our government also? Thousand dollar toilet seats and million dollar studies on the sex life of a butterfly sounds funny, but they are real and are spending money we don’t have. Why must the answer be raise taxes?
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The reality is that nothing acceptable to citizens in terms of cutting amounts to much money. 33% of all spending is SS and Medicare alone. Foreign aid is a tiny percentage of the total. The first step, IMO is to stop adding new spending, then start chipping away at deficit.
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My original comment was concerning tax and spend government with no politics in mind. Both Dems and Republicans have shown they can spend what they want, when they want to. My objection is to the idea that only taxation will erase a deficit and that only tax cuts create deficits. I don’t care whose administration had the largest deficit and I don’t care that some other country has a tax rate that is much larger than ours. That has nothing to do with the price of tea in China.
My position is simply control spending.
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I agree with you that there should be a compromise to control spending while raising taxes more in line with historical tax rates.
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I love it when the tax and spend crowd shows up with the fantasy of higher taxes. There is no end to government plans for spending so higher taxes don’t reduce deficit spending except in the truly short term. Dismantling the Inflation and Reduction Act would be a great start to deficit reduction. Clinton had to joust with Congress over spending, so he had to keep the lid on. Obama was around for 8 years but I can’t recall any great plan for deficit reduction.
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Obama cut the budget deficit by two-thirds over the course of his administration. But you could have easily googled that. More to the point, he offered a grand bargain with the GOP led Congress with 80 percent of deficit reduction in spending cuts in exchange for just 20 percent of reduction by increasing revenue, but the GOP was too beholden to special interests to make a deal. That was the end of the fiscally conservative Republican Party. And you can look at any chart of the deficits and see the spikes during GOP administrations. The last true GOP fiscal conservative was the first President Bush, who courageously agreed to raise taxes for the good of the country.
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I’ll grant you that Bush 1 was the last Republican fiscal conservative or nearly so. But we are only talking Bush2 and Trump since then and I count Trump as an outlier in presidential politics. Obama was in office during the recovery phase of the Great Recession and the economy had no where to go but up.
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Donald Trump, Barack Obama, and George W. Bush had the biggest budget deficits in U.S. history.
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It is disingenuous to call the present amount of tax collections a tax cut when this group knows full well that taxes must be raised in the time frame mentioned to cover Social Security.
Why is it always the income side that it is the problem and not the spending side. There is not enough money in the world to cover what the Washington crowd wants to spend. Take into account what the States and local governments need to spend and our pockets are going to be turned inside out. I say that if Social Security and Medicare are the elephants in the room for the federal budget, then we fix that and the problem goes away. If not, hold the pols responsible for making cuts.
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Not enough money in the world.
It’s by choice. The U.S. is the lowest taxed, including state and local, of any major country.
https://taxprof.typepad.com/.a/6a00d8341c4eab53ef0240a4f47a43200b-800wi
And the richest large country per capita.
The deepest pockets. And the shortest arms.
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As usual, Stephen.s comments are spot on. If we had kept similar tax rates as we had in the 20th century, there would be little to no deficit. The Bush tax cuts in the early 2000’s and the Trump tax cuts in 2017 were devastating to the progress made during the Clinton and Obama administrations toward deficit reduction. Combined with the decision to invade Iraq, it was a hat trick of stupidity, all done under Republican administrations. At least Bush has PEPFAR. Trump’s only meaningful legislation in 4 years was the TCJA. On, and then of course, the GOP sabotaged the IRS for decades, resulting in a further shortfall of revenue. With all that said, right now is a great time to raise taxes as it would help reduce the overheating in the economy.
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