Extending Trump Tax Cuts Would Add $3.5 Trillion to the Deficit, According to CBO

New report finds Republicans’ giveaways to the wealthy and large corporations are significantly more costly than previously estimated

Washington, D.C.—According to a report released today by the nonpartisan Congressional Budget Office (CBO), extending the Trump tax cuts would add $3.5 trillion to the deficit through 2033.

 Written at the urging of Senator Whitehouse (D-RI), Chairman of the Senate Budget Committee, and Senator Wyden (D-OR), Chairman of the Senate Finance Committee, the new report finds the Republicans’ policy priority is a half a trillion dollars more costly than previously estimated.  House Republicans’ legislation to make permanent the Trump tax cuts—and blow up the federal deficit—comes at the same time they are holding the federal debt limit hostage to extract disastrous spending cuts to programs and services like veterans’ support, opioid treatment, law enforcement, and affordable energy.

The new report comes the day before a Senate Budget Committee hearing on how the Bush and Trump tax cuts for the wealthy and corporations have driven recent and projected federal deficits.  They have been the largest driver of deficits over the past two decades and account for 57% of the increase in the debt-to-GDP ratio since 2001.

“MAGA Republicans don’t give a damn about the deficit, and today’s estimate of the cost of kickbacks for their friends and donors is further proof,” said Senator Whitehouse.  “Republicans racked up the national debt by giving tax breaks to their billionaire buddies, and now they want everyone else to pay for them.  It is one of life’s great enigmas that Republicans can keep a straight face while they simultaneously cite the deficit to extort massive spending cuts to critical programs and support a bill that would blow up deficits to extend trillions in tax cuts for the people who need them the least.”

 “Three and a half trillion dollars is an eye-popping long-term price tag for the Trump tax law that Republicans swore up and down would pay for itself,” Wyden said. “Republicans who say they’re worried about the deficit have brought our economy on the brink of default, and yet they want to run up the debt by locking in the Trump tax law that remains horribly skewed toward corporations and the wealthy. The Republican game plan is clear. For every penny they give in tax handouts to the rich, down the road they’re going to demand equivalent cuts that boot people off their health care, increase child hunger, and raise the cost of living for typical Americans.” 

According to the Institute on Taxation and Economic Policy, extending the Trump tax cuts would create a windfall for the top 5 percent of income earners, who would receive nearly 40 percent of the benefits in the first year alone, making this legislation one of the most regressive and expensive tax giveaways in history.  The average taxpayer in the top 1 percent would save nearly $26,000 in just that first year.

CBO’s previous cost estimate for extending the Trump tax cuts was $3 trillion through 2032, but the 10-year budget window now includes more years post-expiration.  The new estimate is part of a larger report analyzing alternative assumptions about spending and revenues.  It also includes a projection that permanently extending the enhancements made to the Affordable Care Act’s premium tax credits—originally enacted in 2021’s American Rescue Plan Act and extended through 2025 by 2022’s Inflation Reduction Act—would cost $300 billion, a fraction of the cost of extending the Trump tax cuts.

Read the full CBO report here.