A Better Way to Pay for Extending the Trump Tax Cuts
A potential solution exists that would keep US debt from spiraling out of control and should be acceptable to Republicans because they floated it not too long ago.
Nothing in life is truly free.
Photographer: Andrew Harrer/Bloomberg via Getty Images
One of the first orders of business in 2025 for Congress and the incoming administration will be the extension of President Donald Trump’s signature 2017 tax law, the Tax Cuts and Jobs Act (TCJA), most of whose individual provisions are set to expire late next year. There’s one problem: America’s debt trajectory is unsustainable.
Even if the TCJA isn’t extended, US debt would reach 122% of gross domestic product in 2034, exceeding the nation’s prior peak of 106% in 1946 just after World War II. But if Congress does extend the TCJA without finding ways to pay for it, the problem becomes even bigger, with debt rising to 133% of GDP by 2034. And that’s before any tax cuts Congress tries to add.