Trump’s tax cuts for the rich cost too much for everyone else | Opinion

Donald Trump and the Republicans in Congress are determined to extend their tax cuts for another ten years, if not longer. That would be a mistake.

To their credit, they know that extending the tax cuts passed in 2017, which are set to expire at the end of 2025, would continue to drive up federal debt without deep cuts in spending. They cannot argue that the tax cuts will pay for themselves with a larger economy, because the deficit actually grew from $590 billion in 2016 to $980 billion in 2019.

The Congressional Budget Office has estimated that the Republican Big Beautiful Bill Act, as passed by the U.S. House in May, would increase the federal debt by $3 trillion by 2035. That’s on top of increases in the federal debt without the bill.

We should all be concerned about federal debt as interest payments on federal debt become a larger fraction of federal expenditures (it is 13% and growing). Without reductions in the federal deficit, those payments will consume federal revenue as the interest rate explodes when lenders lose confidence in the ability of the federal government to pay back federal loans.

The bond market is not partisan. On May 20, investors held off on purchasing a batch of 20-year government bonds, sending rates higher. In 2022, the British government was forced to abandon its plans for a massive tax cut after a huge sell-off by currency and bond traders. Prime Minister Liz Truss was forced to resign after just six weeks in office.

If Congress succeeds in passing a budget that adds $3 trillion to the federal debt, bond rates are sure to rise, increasing payments on federal debt, adding additional trillions of dollars to the debt and hundreds of billions to annual interest payments.

In addition to increasing payments on federal debt, rising bond rates also affect mortgage rates on homes, which closely follow bond rates. If mortgage rates increase, fewer people can purchase homes, and homes lose value.

President Trump thinks his tariffs will fill the gap. Perhaps they would, but if so, then why aren’t they in the budget reconciliation bill? Congress knows that tariffs are a tax on the American people. And the courts are not going to let the President have his way with tariffs without Congress approval.

Without substantial revenue from tariffs, the spending cuts necessary to balance those tax cuts would cause deep pain and suffering. If the tax cuts are sustained, we’d have to cut way back on a lot of things you care about to avoid the debt cliff.

Think about what you care about. Is it immigration and border security? Health care for the poor and elderly? Recreation? Food for the poor? National defense? International aid? Energy security? Climate and the environment? Disaster relief? Social security? Innovation? The arts? Housing? Infrastructure? Education?

Each of these priorities is worthy of support. Waste, abuse and even fraud can be found in each. A recent Government Accounting Office study estimated $162 billion in improper payments across 68 federal programs in 2024. However, those payments aren’t necessarily fraudulent; they often lack sufficient documentation or involve human error. Indeed, DOGE has found far less fraud than that. Closing the budget would therefore require deep cuts in the functioning of those federal programs. Assistance programs would deny worthy aid. Smart investments would be canceled. Security compromised. People would die before their time. Others would suffer greatly.

So, ask yourself if the extension of the tax cuts, which will primarily benefit the top income quintile, is worth substantial cuts in the programs you value.

Elon Musk has called the Big Beautiful Bill Act an “abomination” because it increases federal debt so much. But to reduce the deficit, he wants deeper spending cuts than those in the bill, not a reduction in the tax cuts.

I get the point that many wealthy people are job creators. Elon Musk certainly is. But Warren Buffet famously said that he pays a lower tax rate than his secretary. The tax rate for wealthy people is low enough without the tax cuts. Let them contribute their fair share to the U.S enterprise.

I am not arguing that funding for programs should not be cut. Congress should engage in good faith discussions about funding priorities. If the accumulating federal debt is to be taken seriously, then both spending cuts and tax increases should be on the table.

Extension of the tax cuts is simply unsustainable. The bond market will confirm that conclusion.

Everyone is talking about spending cuts. No one mentions the driver of those cuts, the Elephant in the Room.

This story was originally published June 27, 2025 at 10:14 AM.