FACT BRIEF

Are the lower tax rates enacted in 2017 projected to add at least $1 trillion to the US national debt?

Tuesday, November 3, 2020

By Emanuela Podda Ankrom

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YES

The nonpartisan Congressional Budget Office has estimated the 2017 tax cut legislation will raise the total projected federal deficit over the 2018–2028 period by about $1.9 trillion, thereby adding to total government debt. The Tax Policy Center, a think tank affiliated with Brookings and the Urban Institute, estimates that the cuts will result in budget deficits of between $1 and $2 trillion over the decade.

The CBO calculated that the cuts reduced federal tax revenues to 16.7% of national income, compared to an average 17.4% rate since 1970. Meanwhile the CBO forecasts government spending is likely to grow to 23.4% of national income in 2030 from 21% in 2020.

The tax bill's backers say the deficits now will lead later to more private investment and higher growth. Treasury Secretary Steven Mnuchin told the Senate in February that the cuts will "pay for themselves" over time.

This fact brief is responsive to conversations such as this one.

Sources

CBO: How the 2017 Tax Act affects CBO’s projections

Tax Policy Center: How did the Tax Cut and Jobs Act affect the federal budget outlook?

International Monetary Fund: The Tax Cuts and Jobs Act

Reuters: Despite $1 trillion deficits, Trump tax cuts will still 'pay for themselves'

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Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.