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Trump’s Tax Cuts and the National Debt Claim Donald Trump's tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION'S ENTIRE DEBT ... Rating Not True Like this fact check? Reporting On January 25 2023, a Reddit account shared a screenshot of a tweet by musician and political blogger Jeff Tiedrich to r/WhitePeopleTwitter , asserting that former United States President Donald Trump’s tax cuts were responsible for a quarter of the American national debt: Donald Trump’s tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION’S ENTIRE DEBT. from WhitePeopleTwitter A date and time were visible in the screenshot, indicating the tweet was published at 10:25 AM on January 25 2023. At least one Reddit user (u/Full_Artichoke_8583) observed that Tiedrich’s claims were unsourced as presented: Wish he posted the source of this information. Florida is where wokes go to die... Please enable JavaScript Florida is where wokes go to die A second account complained that Tiedrich’s tweets frequently followed a format similar to the one in the image: He ALWAYS starts tweets with holy fucking shit and it bothers the hell out of me[.] On Twitter , Tiedrich’s claim about the Trump administration’s tax cuts and the national debt proved to be popular, accumulating more than half a million views in a few hours. It did not link to any information supporting the claim about the connection between the tax cuts and the national deficit: holy fucking shit, Donald Trump's tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION'S ENTIRE DEBT and Republicans want to cut YOUR social security to pay for it, and that's what this debt ceiling bullshit is all about. fucking unacceptable — Jeff Tiedrich (@itsJeffTiedrich) January 25, 2023 Visible threaded response tweets did not seem to point to any potential sources supporting the claim. However, occasional memes with similar assertions did appear among them: pic.twitter.com/TU5vcVCiER — MetalassicalGal (@cw_janene) January 25, 2023 Additional threaded responses quibbled over matters such as the definition of national debt, and the amount: What? Where did you come up with the 421B number? The debt is 31T+. — Brandon C (@bosden303) January 25, 2023 According to FiscalData.treasury.gov ‘s What is the national debt? page, the national debt is the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation’s history. It stood at $31.5 trillion on January 25 2023, and the page further explained: The national debt is the amount of money the federal government has borrowed to cover the outstanding balance of expenses incurred over time. In a given fiscal year (FY), when spending (ex. money for roadways) exceeds revenue (ex. money from federal income tax), a budget deficit results. To pay for this deficit, the federal government borrows money by selling marketable securities such as Treasury bonds, bills, notes, floating rate notes, and Treasury inflation-protected securities (TIPS). The national debt is the accumulation of this borrowing along with associated interest owed to the investors who purchased these securities. As the federal government experiences reoccurring deficits, which is common, the national debt grows. Simply put, the national debt is similar to a person using a credit card for purchases and not paying off the full balance each month. The cost of purchases exceeding the amount paid off represents a deficit, while accumulated deficits over time represents a person’s overall debt. ... The U.S. Treasury uses the terms national debt, federal debt, and public debt interchangeably. Noting that the United States has carried debt since its inception, the page indeed referenced tax cuts as one of the many factors responsible for recent fluctuations: Notable recent events triggering large spikes in the debt include the Afghanistan and Iraq Wars, the 2008 Great Recession, and the COVID-19 pandemic. From FY 2019 to FY 2021, spending increased by about 50%, largely due to the COVID-19 pandemic. Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt. Tiedrich mentioned this debt ceiling bullshit in his tweet. The page excerpted above provided a section about the debt ceiling: The debt ceiling, or debt limit, is a restriction imposed by Congress on the amount of outstanding national debt that the federal government can have. The debt ceiling is the amount that the Treasury can borrow to pay the bills that have become due and pay for future investments. Once the debt ceiling is reached, the federal government cannot increase the amount of outstanding debt, losing the ability to pay bills and fund programs and services. However, the Treasury can use extraordinary measures authorized by Congress to temporarily suspend certain intragovernmental debt allowing it to borrow to fund programs or services for a limited amount of time after it has reached the ceiling. Since the United States has never defaulted on its obligations, the scope of the negative repercussions related to a default are unknown but would likely have catastrophic repercussions in the United States and in markets across the globe. Without an explicit source attached to the tweet, the figures provided on the page formed a basis to evaluate the claim’s veracity. If the national debt totaled $31.5 trillion dollars, a quarter of that amount would total approximately $7.875 trillion. On the Reddit thread above, the post’s submitter (OP) responded to comments requesting a citation for Tiedrich’s claim. The user linked to a July 2019 blog post from the Committee for a Responsible Federal Budget (CRFB is a fiscal think tank described by Media Bias/Fact Check as center-right, with highly factual reporting.) It began: If the recent [2019] budget deal is signed into law, it will be the third major piece of deficit-financed legislation in President Trump’s term. In total, we estimate legislation signed by the President will have added $4.1 trillion to the debt between 2017 and 2029. Over a traditional ten-year budget window, the President will have added $3.4 to $3.8 trillion to the debt. The source of the debt expansion is split relatively evenly between tax and spending policy. The Tax Cuts and Jobs Act (TCJA) was the single largest contributor to the $4.1 trillion figure, increasing debt by $1.8 trillion through 2029 (more than the entire cost is through 2027). This number could easily climb higher if lawmakers extend the individual tax cuts that are set to expire after 2025, which would add another $1 trillion to the debt. The blog post provided a partial basis to support the claim regarding its estimate of a $3.4-to-$3.8 trillion figure increase to the national debt. But the page was published long before the events of 2020, and it blamed tax and spending policy as the cause of the debt expansion. In August 2021, CRFB published Comparing the Permanent Costs of Build Back Better and the TCJA, but it did not include any figures totaling $7.8 trillion. Investopedia’s routinely updated page Explaining the Trump Tax Reform Plan contained a National Debt section, along with similar figures, citing CFRB. Financial site The Balance updated a page on the topic (How Much Trump’s Tax Cuts Cost the Government) in November 2021, concluding: Tax cuts aren’t effective at boosting economic growth when the economy is already expanding.16 They also don’t work well when tax rates are below 50% to 65%.17 There are three main estimates of the cost of Trump’s tax cuts: The Trump administration said it would generate $1.8 trillion in revenue, more than making up for its $1.5 trillion cost. But that included the impact of the FY 2018 budget. The Joint Committee on Taxation said the TCJA would increase the deficit by $1 trillion, but that does not include the impact of the FY 2018 budget. The Tax Foundation said that the act would add $448 billion to the deficit. It also includes the impact of eliminating the Obamacare mandate. If the individual cuts are made permanent, the cost will rise to $2.3 trillion without having been successful at significantly boosting wages or increasing jobs. A November 2022 Yahoo Finance analysis was critical of the Trump-era tax cuts, but even then provided a far smaller figure than the quarter in the tweet: As a reminder, the 2017 Tax Cuts and Jobs Act (TCJA), as it was known, simplified tax filing for many families and lowered the tax rates most filers pay. It also lowered the corporate income tax rate from 35% to 21% and cut other business taxes. The law cost about $1.9 trillion, which means that’s the amount budget analysts estimated it would add to the national debt during the decade after it went into effect. [...] Including all four years since the tax cuts went into effect—two before COVID, one in the midst of COVID, and one after COVID—individual and corporate tax revenue is $195 billion below the CBO’s 2018 estimate. The chart below shows tax receipts a bit more simply, as a percentage of GDP. On the whole, the Trump tax cuts are on track to cost more, not less, than the CBO’s 2018 estimate of $1.9 trillion in additional federal debt. That means they’re mostly just a transfer of money from future taxpayers to present ones — and no miracle at all. That analysis touched on the disruptive economic climate from 2020 forward, and how those factors confounded tax revenue projections in 2019 and earlier: ... claims about a supply-side tax miracle in 2021 completely ignore the snapback from the 2020 plunge in tax revenue and also don’t account for the unprecedented $6 trillion in COVID-related stimulus Congress passed in 2020 and 2021. Tax revenues boomed in 2021 and some supporters of the 2017 Tax Cuts and Jobs Act argue that the big tax reductions in the bill deserve the credit, the Brookings Institution reported earlier this year [2022]. But there is a much better explanation: Last year’s strong economic growth, high inflation, and pandemic-related relief legislation. A January 14 2021 ProPublica report , Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years, contained a figure close to the quarter in the tweet and the $31.5 trillion figure in January 2023. Published days before Trump left office, it began: One of President Donald Trump’s lesser known but profoundly damaging legacies will be the explosive rise in the national debt that occurred on his watch. The financial burden that he’s inflicted on our government will wreak havoc for decades, saddling our kids and grandkids with debt. The national debt has risen by almost $7.8 trillion during Trump’s time in office. That’s nearly twice as much as what Americans owe on student loans, car loans, credit cards and every other type of debt other than mortgages, combined, according to data from the Federal Reserve Bank of New York. It amounts to about $23,500 in new federal debt for every person in the country. The growth in the annual deficit under Trump ranks as the third-biggest increase, relative to the size of the economy, of any U.S. presidential administration, according to a calculation by a leading Washington budget maven, Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center. And unlike George W. Bush and Abraham Lincoln, who oversaw the larger relative increases in deficits, Trump did not launch two foreign conflicts or have to pay for a civil war. [...] The combination of Trump’s 2017 tax cut and the lack of any serious spending restraint helped both the deficit and the debt soar. So when the once-in-a-lifetime viral disaster slammed our country and we threw more than $3 trillion into COVID-19-related stimulus, there was no longer any margin for error. Of the cited increase in both the deficit and the debt, ProPublica referenced a specific 2018 projected cost of $1.8 trillion for the tax cuts: There were multiple culprits. Trump’s tax cuts, especially the sharp reduction in the corporate tax rate to 21% from 35%, took a big bite out of federal revenue. The CBO [Congressional Budget Office] estimated in 2018 that the tax cut would increase deficits by about $1.9 trillion over 11 years. [...] In addition to forcing us to reduce the proportion of the budget spent on the future to help pay for the past, there’s a second reason that huge and growing budget deficits matter: interest costs. Finally, we located the $7.8 trillion figure in a January 23 2023 Deseret News article , the URL for which contained the words Trump administration responsible for 25 percent of national debt. Its source code contained a different title than the headline (Is the Trump administration responsible for 25% of national debt?), and it addressed a similar, but far broader claim that 25 percent of the national debt was acquired during Trump’s administration, not from the tax cuts alone: Details: The 25% claim [25% of the United States’ total national debt was accrued during the Trump administration] stemmed from a tweet from David Jolly, an MSNBC contributor and former Florida representative, who was responding to a tweet from House Speaker Kevin McCarthy. McCarthy had argued that House Republicans are on a mission to end wasteful Washington spending. Jolly responded, For context, roughly 25% of our total national debt incurred over the last 230 years actually occurred during the 4 years of the Trump administration. That’s right. 25% of our entire national debt, all during the Trump years. A subsequent section reported that the national debt rose by $7.8 trillion in total during Trump’s single term in office; tax cuts were only part of that figure: According to U.S. Treasury data, the national debt level rose by $7.8 trillion during Trump’s four years as president, which is about 25% of the current $31 trillion in national debt. A popular January 25 2023 tweet by Jeff Tiedrich asserted that Donald Trump’s tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION’S ENTIRE DEBT, no source for the claim was included. The figure aligned with a January 23 2023 Deseret News item about a total increase of 25 percent (or a quarter) to the national debt during Trump’s administration. It did not appear the cited figure of $7.8 trillion was due to tax cuts alone, nor did we find any information to substantiate the claim. Article Sources + Donald Trump's tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION'S ENTIRE DEBT ... | Reddit Donald Trump's tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION'S ENTIRE DEBT ... | Twitter Donald Trump's tax cuts for the obscenely wealthy are responsible for a QUARTER OF OUR NATION'S ENTIRE DEBT ... | Twitter 2023 National Debt | Twitter What is the national debt? President Trump’s $4 Trillion Debt Increase | CRFB.org Committee for a Responsible Federal Budget | Media Bias / Fact Check Comparing the Permanent Costs of Build Back Better and the TCJA | CRFB.org Explaining the Trump Tax Reform Plan How Much Trump's Tax Cuts Cost the Government 3 myths about the Trump tax cuts Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years Is the Trump administration responsible for 25% of national debt? Posted in Disinformation , Fact Checks Tagged cost of trump tax cuts , jeff tiedrich , trump tax cuts , viral tweets , what is the national debt
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