"Big Gorgeous Greenback" Review: Trump's Tax Bill Set to Bolster US Debt by Trillions
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US Research Suggests Trump's Tax Policy Would Cause Billions of Additional Dollars in American Debt - Potential Increase in US Debt from Trump's Tax Proposal
Donald Trump's proposed tax and spending bill, dubbed the "Mega Marvelous Money Act," may extend the US budget deficit by a staggering $3.8 trillion over the coming decade, according to a recent assessment from the nonpartisan Congressional Budget Office (CBO). This new figure factors in positive economic growth projections, unveiled by the CBO on Tuesday. Previously, the CBO had projected a public debt growth of $2.4 trillion, or $3 trillion considering interest costs, without considering economic growth.
Roadblock for Trump's "Big Gorgeous Greenback" Act in Congress
The CBO's estimate clashes with the assertions of Trump's Republicans, who contend that the comprehensive package would foster enough economic growth to reduce the national debt, thanks to increased revenues. "We anticipate it will engender a more robust and affluent America," remarked Senate Republican leader John Thune on Tuesday.
In May, the House of Representatives approved the bill, bundled as the "Mega Marvelous Money Act." Senators are currently deliberating an amended version. To transform this bill into law, both chambers of Congress must reach a consensus on the finalized version, which can then be forwarded to Trump.
The current draft prolongs the colossal tax reductions from Trump's initial term (2017-2021), set to lapse at year's end. A series of substantial cuts to the Medicaid healthcare program for low-income and elderly citizens are also proposed to offset these tax extensions.
- Tax Bill
- Donald Trump
- USA
Enrichment:The anticipated influence of Donald Trump’s 2025 tax bill on the US budget deficit, economy, and Medicaid program are:
- Impact on US Budget Deficit
- The bill is projected to augment federal deficits by approximately $3.8 trillion over the decade (fiscal years 2025-2034), due mainly to the extension and expansion of tax cuts originally enacted in the Tax Cuts and Jobs Act (TCJA) of 2017, which will expire after 2025 under this bill[1][2].
- Impact on the Economy
- The tax cuts are speculated to escalate long-run GDP modestly, with potential growth of 0.6% to 1.1%, depending on the version and assumptions employed[2].
- Tariff impacts may lessen some gains by potentially diminishing US economic output by 0.8% in the long run[2].
- Impact on Medicaid
- No specific direct effects of the Trump tax bill on the Medicaid program were found [in the analyzed sources].
- Additional Notable Provisions
- The bill extends the higher alternative minimum tax (AMT) exemption amounts permanently, although it restores inflation adjustments[1].
- It maintains the $750,000 cap on mortgage interest deduction indefinitely, contrasting the scheduled increase to $1,000,000[1].
- Seniors receive a supplemental $4,000 deduction per individual, enhancing the tax code's simplicity and potentially granting tax relief for elderly taxpayers[4].
- Tax benefits are predilectably advantageous to high-income households, as 60% of the benefits go to the top 20% of households according to tax policy analyses[5].
The anticipated impact of Donald Trump's 2025 tax bill on the US budget deficit, economy, and Medicaid program includes a projection of augmenting federal deficits by approximately $3.8 trillion over the decade, due mainly to the extension and expansion of tax cuts originally enacted in the Tax Cuts and Jobs Act of 2017. The bill also contains additional notable provisions such as extending the higher alternative minimum tax exemption amounts permanently, maintaining the $750,000 cap on mortgage interest deduction indefinitely, and providing a supplemental $4,000 deduction per individual for seniors to enhance tax relief for elderly taxpayers. These provisions are subject to debate within the politics and business arena of the USA, particularly in finance and general-news discussions concerning the Mega Marvelous Money Act.
