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How the Trump Tax Cut Is Helping to Push the Federal Deficit to $1 Trillion
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| Contributor | RP |
| Last Edited | RP Jul 26, 2018 09:12am |
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| Category | Analysis |
| Author | Jim Tankersley |
| News Date | Wednesday, July 25, 2018 03:00:00 PM UTC0:0 |
| Description | The amount of corporate taxes collected by the federal government has plunged to historically low levels in the first six months of the year, pushing up the federal budget deficit much faster than economists had predicted.
The reason is President Trump’s tax cuts. The law introduced a standard corporate rate of 21 percent, down from a high of 35 percent, and allowed companies to immediately deduct many new investments. As companies operate with lower taxes and a greater ability to reduce what they owe, the federal government is receiving far less than it would have before the overhaul.
The Trump administration had said that the tax cuts would pay for themselves by generating increased revenue from faster economic growth, but the White House has acknowledged in recent weeks that the deficit is growing faster than it had expected. The Office of Management and Budget said this month that it had revised its forecasts from earlier this year to account for nearly $1 trillion of additional debt over the next decade — on average, almost $100 billion more a year in deficits. |
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