During the debate over the Republicans’ tax plan — to the extent that there was an actual “debate” — GOP policymakers insisted that they didn’t have to offset the costs of the tax giveaways. Party officials instead argued, with great sincerity, that tax breaks for the wealthy and big corporations would magically pay for themselves through increased growth.
The argument wasn’t limited to partisan radicals. Even Republican Sen. Susan Collins of Maine, ostensibly one of her party’s more reasonable members, not only defended her party’s regressive Republican tax plan, she also insisted, more than once, that the tax breaks would pay for themselves.
They did not pay for themselves.
The New York Times reported on the “most rigorous and detailed study” to date on the effects of the GOP’s tax package and found that while the 2017 law “delivered a modest pay bump for workers” — one that fell far short of the party’s promises before the law passed — those small benefits came “at a high cost to the federal budget.”
The corporate tax cuts came nowhere close to paying for themselves, as conservatives insisted they would. Instead, they are adding more than $100 billion a year to America’s $34 trillion-and-growing national debt, according to the quartet of researchers from Princeton University, the University of Chicago, Harvard University and the Treasury Department.
To be sure, these findings aren’t altogether surprising. We’ve known for several years that the Trump-era tax breaks for the wealthy and big corporations didn’t pay for themselves. We’ve also known for quite some time that this question has been tested and re-tested, and the results are always the same.
So why does the evidence matter? Several reasons, actually.
First, there’s the question of accountability. The Republicans who claim to care deeply about “fiscal responsibility” and balanced budgets insisted that their tax giveaways wouldn’t add to the deficit that they occasionally pretend to take seriously. The public, when assessing these policymakers’ work, deserves to know that the GOP officials got this important question wrong.
Second, credibility matters, too. Republicans — who are inexplicably enjoying a sizable advantage in polling on economic policy, despite the realities of recent decades — claim to know what they’re talking about. When compelling evidence to the contrary comes to the fore, it warrants attention.
Third, at the heart of Republicans’ thinking about economic policy isn’t just the discredited belief that giving tax breaks to the wealthy produces broad prosperity, but also that the party need not concern itself with paying for the giveaways. Ideally, when presented with decades’ worth of evidence disproving their core assumption, the party would reconsider this misguided belief.
But perhaps most important of all is the fact that GOP officials are eager to repeat their mistake. In fact, The Washington Post reported in January that Donald Trump has privately told his allies “that he is keenly interested in cutting corporate tax rates again,” despite the failures of his 2017 effort.
This post updates our related earlier coverage.