Further Tax Cuts Would Be Irresponsible

Oct 24, 2018 | Taxes

For Immediate Release

Recently, President Trump called for a new 10 percent middle class tax cut, which news reports suggest Congress is working to develop into law. While President Trump has claimed the new cuts will be revenue neutral, no offsets have been discussed. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

We apparently haven’t yet reached the height of fiscal recklessness and irresponsibility. We’re on course to borrow $2 trillion to pay for the last tax cuts, and if new tax cuts aren’t paid for they could add as much as $2 trillion more to the debt.

On our current course, we could see the return of trillion-dollar deficits by the end of this year and debt as large as the entire economy within a decade or so. Interest payments, meanwhile, will approach $1 trillion within a decade, eclipsing what we spend on Medicaid or defense. 

Recent tax cuts and spending increases significantly worsened our fiscal outlook and threaten long-term economic growth; further unpaid-for tax cuts would make a bad situation far worse.

At a minimum, tax writers should adhere to the President’s commitment that new tax cuts be revenue neutral. Even then, it would be far better to use new offsets to finance the cost of tax cuts and spending hikes from the past year than for new expensive tax cuts. And let’s not forget that tax cuts put on the credit card don’t pay for themselves – not even close.

Congress should abandon this idea and instead pursue an agenda to put our debt on a downward path back to normal levels. We must not triple down on recent fiscal irresponsibility with more needless debt.

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For more information contact Patrick Newton, press secretary, at newton@crfb.org.