House Republicans are currently working on the final details of a bill to enact President Trump’s tax cuts. However, independent analysts and investors warn that the current projections mask the true fiscal impact. The official congressional Joint Committee on Taxation estimates the bill will cost $3.8 trillion over a decade. This estimate relies on expiring tax breaks after four years, a maneuver budget experts find misleading. The Committee for a Responsible Federal Budget calculates that extending these benefits for a full decade would raise the deficit by $5.2 trillion.
Republicans argue that the tax cuts will boost economic activity, generating more revenue. They point to provisions like the 100% expensing of business investments and incentives for factory construction. However, analysts outside of Washington D.C. remain unconvinced. Barclays Plc economists titled a research note on the topic, “One big, beautiful” deficit, highlighting investor concerns. The intensifying scrutiny of US government borrowing continues as negotiations on the draft bill progress.
