We’re all going to end up paying for the One Big Beautiful Bill — it’s just a matter of when and how.
The prevailing view espoused by the Republican politicians responsible for the One Big Beautiful Bill is disappointing, if unsurprising.
Speaker Mike Johnson and the House GOP leadership crowed that “the House has passed generational legislation that permanently lowers taxes for families and job creators, secures the border, unleashes American energy dominance, restores peace through strength, reduces spending more than any other bill ever has, and makes government more efficient and effective for all Americans.”
The White House trumpeted “a once-in-a-generation piece of legislation that makes good on [President Trump’s] campaign promises and puts America First.” The bill, according to the White House, includes “the largest tax cut in history for middle- and working-class Americans.”
But should the American people celebrate “permanently” lowering taxes if the government of, by, and for the people has been running consistently massive annual deficits for two generations, with no end in sight? Can a political party truly be putting America first if there’s no attempt to match means with ends?
As everyone knows, there is no such thing as a free lunch — and that goes even when Republicans control both houses of Congress and the White House. It may have been possible to believe, in 1980 or 2000 or 2016, that deficit-financed tax cuts would “pay for themselves” via vastly increased economic growth or that one could “starve the beast” by forcing a low tax regime on the federal government.
With a $37 trillion national debt and a federal government that’s larger than ever, however, that idea has proved to be folly.
The GOP may be celebrating the fact today that it has avoided tax increases by renewing the 2017 tax cuts — and even extending additional tax favors to certain interest groups in “no tax on tips,” “no tax on overtime,” the increased SALT deduction, and the larger standard deduction for seniors (already America’s wealthiest demographic).
But by not even attempting to significantly alter the downward trajectory of our federal fiscal ledgers by addressing runaway entitlement spending in Social Security and Medicare, what Republicans in Congress and this administration have done in the real world is pass on future tax increases to our children (or our older selves a few years down the line) either via draconian tax increases at the point of national fiscal crisis or by means of reduced purchasing power through the back-door tax hike of monetizing the debt.
If anyone tells you that the weight of those taxes or the cost of inflating the debt won’t fall on the middle class, they’re lying to you. The Republican view that accumulating the largest pile of debt in human history will have no downstream negative effects on the American people and the American economy is just as much magical fairy dust as the Biden-era progressive insistence that modern monetary theory had consigned conservative worries about inflation and debt to the ash heap of history.
Many people apparently believe that if they must choose between low tax rates with foolish spending and high tax rates with foolish spending, it’s better to choose the former. But we’ll pay for our drunken-sailor spending and debt eventually, and the effects will fall on us in more inefficient, stupid, and oppressive ways later than if we faced the problem now. Worse, it’s very likely the bill will come due at a time of crisis and not of our choosing.
Don’t get me wrong: I’d rather we cut overall spending dramatically, balanced the budget, paid down the debt, and created a sane and sensible tax code. But if we won’t do that, I’d rather we raise enough revenue to pay for our addiction to consumption and entitlement spending, because, if we don’t, we’ll likely suffer a worse result down the road than a return to the tax code of FY 2016.
Many on the right will say that “America has a spending problem, not a revenue problem.” I disagree. I think we have a responsibility problem and a sanity problem. If the American people insist — as they do through their representatives in Congress, year after year — that the feds spend something like $7 trillion annually, then they should insist on raising something like $7 trillion annually in taxes.
The American people right now insist on no such thing, of course — and so the “fiscally responsible” Republicans in Congress happily locked the country into trillions of dollars of debt-financed future spending. And then they cut taxes.
But we’re all going to end up paying for it. It’s just a matter of when and how.