The Congressional Budget Office (CBO) projected in a new report that extending tax cuts passed as part of former President Trump’s 2017 tax law could add trillions of dollars to the country’s deficits over roughly the next decade.
Citing figures from the Joint Committee on Taxation, the CBO said Wednesday that extending the law’s expiring income tax provisions could add $3.3 trillion net to the country’s primary deficits during the period 2025-2034.
“Most of the effects would occur after 2026,” stated the CBO, while also referring to projections that “increased net interest spending would add $467 billion to these deficits.”
Next year, a portion of the individual income tax provisions in the law will expire, the CBO noted, adding that these provisions would “affect important elements of the individual income tax code.”
These include statutory tax rates and brackets, allowable deductions, “the size and refund of the child tax credit, the 20 percent deduction for certain business income, and the income levels at which the alternative minimum tax takes effect,” the agency said. .
The CBO also projected hundreds of billions of dollars in additional costs for the possible extension of the law’s largest estate and gift tax exemptions, as well as other parts of the law.
Democrats were quick to seize on the projections.
“Trump’s tax cuts were a gift to the ultra-rich and a bad deal for American families and small businesses,” Senate Budget Committee Chairman Sheldon Whitehouse (D-R.I.) said in a statement on Wednesday.
“With its imminent expiration, we have an opportunity to undo the damage, fix our broken tax code, and make big corporations and the ultra-wealthy start paying their fair share.”
However, GOP lawmakers, who sought to make the tax cuts in the 2017 tax law permanent, rejected Democratic criticism of the law, defending the tax measure as pro-growth while taking aim at the CBO’s scoring of the cuts. .
The cuts’ expiration date also comes as Congress faces another potentially nasty fight next year over the debt limit, which limits how much money the Treasury can borrow to pay the nation’s bills.
Congress voted last year to suspend the maximum debt limit until 2024 – when the country’s debt was $31.4 billion. Now it is at more than US$34 trillion.
This story originally appeared on thehill.com read the full story
