TRUMP’S 2017 TAX CUTS:

THEY DID NOT PAY FOR THEMSELVES

In 2017, the Tax Cuts and Jobs Act (TCJA) reduced tax rates for individuals and corporations, with projections indicating that it would pay for itself through long-term economic growth. However, actual evidence and recent analysis tell a different story. A 2024 study by the Center for American Progress found that, outside of economic downturns, federal revenues fell to record lows as a share of GDP following the Trump cuts—dropping from a projected 18.0% in 2023 to only 16.5%, with similar lags in 2024 and 2025. This reflects a significant shortfall in revenues compared to pre–TCJA expectations.

A Marketplace Q&A from February 11, 2025, further debunks the notion that the 2017 tax cuts paid for themselves. While businesses briefly saw increased profits—and thus tax revenue—from lagged wage growth and higher prices, these upticks did not come close to offsetting the long-term revenue losses. Most nonpartisan models, including those from the CBO and the Joint Committee on Taxation, show that the TCJA created a net revenue loss of over $1.4 trillion through 2024—even after accounting for “dynamic” feedback.

Beyond revenue impacts, the structure of the tax cuts generated continued controversy. Many provisions were explicitly scheduled to expire in 2025—and already worry economists and fiscal analysts. Extending them without offsetting revenue or spending reductions is projected to add another $4–$4.6 trillion to the deficit over the next decade. Bush-style tax cut experiments, such as those in Kansas, have repeatedly failed to deliver sustained revenue boosts or measurable improvements in investment or GDP.

A firm consensus has emerged: the TCJA did not pay for itself. Revenues declined, deficits expanded, and gains were disproportionately allocated to corporations and higher-income households. As policymakers weigh extensions of these cuts in 2025, many economists argue that fairness and fiscal responsibility require either offsetting reforms or letting them expire to strengthen public finances.

Tax Reform: H.R. 1, Tax Cuts and Jobs Act (2017)

The 2017 Tax Law Did Not Boost the Economy (Center on Budget and Policy Priorities, 4-8-25)

Did the 2017 tax cuts really pay for themselves? (Marketplace, 2-11-25)

The Trump Tax Cuts Led to Record-Low, Not High, Revenues Outside of a Recession (Center for American Progress, 8-28-24)

Did the Tax Cuts and Jobs Act Pay for Itself? (Cato, 7-31-24)

Preliminary Details and Analysis of the Tax Cuts and Jobs Act (Tax Foundation, 12-18-17)