Washington, D.C. — Today, the Center for American Progress released a report with new findings on how tax cuts that initially began under Republican trifectas over the past 25 years are responsible for the increasing federal debt measured as a percentage of the U.S. economy. The Bush tax cuts, their bipartisan extensions, and the Trump tax cuts slashed taxes disproportionately for the wealthy and profitable corporations. Together, they have cost $10 trillion since their enactment, and they are responsible for more than 90 percent of the increase in the national debt as a percentage of the economy, excluding the debt attributable to the one-time costs of responding to the COVID-19 pandemic and the Great Recession. Over time, these tax cuts will grow to be responsible for the entire increase in the debt ratio since their enactment.
This new report analyzes how these tax cuts are responsible for the existence of long-term primary deficits. In fact, relative to previous projections, today’s federal spending is down, not up. If the Bush tax cuts, their bipartisan extensions, and the Trump tax cuts did not exist, even with an aging population and rising health care costs, revenues would keep up with federal primary spending—that is, spending excluding interest costs. This report’s analysis shows that the Bush and Trump tax cuts are responsible for the growing national debt as a percentage of the economy.
“There is no impending debt crisis. Current levels of debt are, on their face, sustainable. It’s the Bush tax cuts, their bipartisan extensions, and the Trump tax cuts that are driving the increase in the ratio of debt to gross domestic product, or the debt ratio. Relative to the last time the Congressional Budget Office projected a stable debt ratio, spending is down, not up. It’s these tax cuts that are responsible for the ever-increasing debt as a percentage of the economy,” said Bobby Kogan, senior director of Federal Budget Policy at CAP and author of the report.
Read the report here: “Tax Cuts Are Primarily Responsible for the Increasing Debt Ratio” by Bobby Kogan
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