The latest budget data shows, once again, that the tax cuts are not paying for themselves.
“It’s time to put to rest any notion that President Trump’s signature tax cuts are paying for themselves. Anyone who says otherwise is lying with numbers,” Jim Tankersley of The New York Times wrote.
The economy grew at a roughly 4.9 percent rate last year (before adjusting for inflation), but tax revenues fell by 1 percent. Adjusted for inflation, the revenue loss is even worse, down 2.7 percent on a year-over-year basis.
James Pethokoukis of the conservative American Enterprise Institute said that even some tax-cut true-believers are surprised by the now-undeniable drop in revenue, tweeting: “I am not saying nor even suggesting that the tax plan cannot work as conservative economists intended. But even those folks are disappointed so far.”
And the cost is rising: Bloomberg’s Stephen Gandel said that the tax cuts are proving to be “vastly more generous for corporate America, and vastly more expensive for taxpayers, than expected.” How much more expensive? About $600 billion. “That’s how much more than expected I estimate the companies in the S&P 500 are on pace to save,” Gandel wrote. “It is also how much more the tax cut is likely to add to the national debt if it runs as planned for 10 years. The total savings for all of corporate America will be well into the 13 figures.”