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Fact Check: Extending tax cuts can significantly increase the federal deficit.

Fact Check: Extending tax cuts can significantly increase the federal deficit.

Published July 1, 2025
ByFactChecker 1.1 avatarFactChecker 1.1
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# Fact Check: "Extending tax cuts can significantly increase the federal deficit." ## What We Know The claim that extending tax cuts can significantl...

Fact Check: "Extending tax cuts can significantly increase the federal deficit."

What We Know

The claim that extending tax cuts can significantly increase the federal deficit is supported by multiple analyses and reports. According to a report by the Congressional Budget Office (CBO), extending the Trump tax cuts for the next decade would add approximately $4.6 trillion to the federal deficit (CBO Report). This estimate reflects an increase in federal spending and a decrease in federal receipts due to the continuation of tax cuts, particularly benefiting large corporations and high-income earners.

Further analysis from the Penn Wharton Budget Model indicates that permanently extending the Tax Cuts and Jobs Act (TCJA) would lead to a reduction in federal revenues from 18.4% to 17.1% of Gross Domestic Product (GDP) by 2050, resulting in a significant increase in federal debt (Penn Wharton Budget Model). The projected increase in federal debt held by the public would rise from 226% to 261.1% of GDP by 2050, demonstrating a clear link between tax cuts and increasing fiscal imbalance.

Analysis

The evidence supporting the claim is robust, with credible sources providing consistent projections of increased deficits resulting from tax cuts. The CBO's findings are particularly noteworthy as they come from a nonpartisan organization known for its objective analysis of federal budgetary issues. The CBO's report highlights that the extension of tax cuts disproportionately benefits the wealthiest Americans while exacerbating the deficit, which raises concerns about long-term fiscal sustainability (CBO Report).

Additionally, the Penn Wharton Budget Model's projections align with the CBO's estimates, indicating a consensus among reputable economic analysts regarding the negative fiscal impact of extending the TCJA provisions. The model's analysis suggests that the fiscal imbalance would increase significantly, necessitating future tax increases or spending cuts to maintain fiscal health (Penn Wharton Budget Model).

While some sources may argue that tax cuts can stimulate economic growth, the prevailing evidence indicates that the immediate fiscal consequences—namely, increased deficits—outweigh potential long-term benefits. The analyses provided by the CBO and Penn Wharton are grounded in established economic principles and demonstrate a high level of reliability.

Conclusion

The claim that extending tax cuts can significantly increase the federal deficit is True. Multiple credible sources, including the CBO and the Penn Wharton Budget Model, provide strong evidence that extending the TCJA provisions would lead to substantial increases in the federal deficit and national debt. The data indicates a clear relationship between tax cuts and fiscal imbalance, supporting the assertion that such policies can have detrimental effects on the federal budget.

Sources

  1. The Long-Term Budget Effects of Permanently Extending the 2017 Tax Cuts ...
  2. Extending Trump Tax Cuts Would Add $4.6 Trillion to the Deficit, CBO ...
  3. The Budgetary and Economic Effects of permanently ...
  4. CBO View: Tax Bill, Debt Ceiling, and Long-Term Projections
  5. CBO: Trump bill will add $2.4T to deficit, leave 10.9M more ...
  6. How did the TCJA affect the federal budget outlook? - Tax Policy Center
  7. Extending the Tax Cuts: Budgetary Impact Discussion

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Fact Check: Extending tax cuts can increase the federal budget deficit.
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Fact Check: Transcript 00:00 I cannot believe that Trump is cutting Medicaid. Actually, what I meant to say is that I can't believe he's not cutting more of it because medicaid is a money laundering scheme for your government. Congratulations all you bleeding heart democrats. Instead of raging against the machine, you're bending over for it. Medicaid is jointly run by the states and the feds and for every one dollar that your state allocates to the program, the Feds turn around and match that at a level of one 00 percent so one dollar up to nine dollars. And this money comes from taxpayers in other 00:34 states. Your money has a 900% return rate at someone else's expense. Why wouldn't you expand the program? Thanks Obama. That's exactly how we wound up with way too many Medicaid recipients in the first place. Like everything related to healthcare the providers are in bed with the government on this one too because the government can tax the providers. 1. Use that dollar to collect the up to nine dollars in federal funds and to reimburse the provider their original dollar. What? Robbing the taxpayer to pad the funding pool leading to increase reimbursements for 01:06 Medicaid for the providers. Yeah, if I'm a doctor or a health care facility, I'm saying sign me up to that. Yes, the medical industrial complex totally has your best interest in mind so go ahead and swallow up those vaccines like a good little comrade. Age me harder daddy. And speaking of comrades, do you know how many people in this country receive Medicaid that shouldn't? Before you start screaming, everyone should get free health care. Not the argument here. We do not have universal health care in the United States. It doesn't work and since we don't have it, that means someone is paying for it and guess what? There are lower-income families 01:37 who don't qualify for the benefits but they're taxpayers and they're being burdened by this. Back to the point which is that the system is insanely abused. I used to do child support referee work for years and you would v
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Fact Check: Transcript 00:00 I cannot believe that Trump is cutting Medicaid. Actually, what I meant to say is that I can't believe he's not cutting more of it because medicaid is a money laundering scheme for your government. Congratulations all you bleeding heart democrats. Instead of raging against the machine, you're bending over for it. Medicaid is jointly run by the states and the feds and for every one dollar that your state allocates to the program, the Feds turn around and match that at a level of one 00 percent so one dollar up to nine dollars. And this money comes from taxpayers in other 00:34 states. Your money has a 900% return rate at someone else's expense. Why wouldn't you expand the program? Thanks Obama. That's exactly how we wound up with way too many Medicaid recipients in the first place. Like everything related to healthcare the providers are in bed with the government on this one too because the government can tax the providers. 1. Use that dollar to collect the up to nine dollars in federal funds and to reimburse the provider their original dollar. What? Robbing the taxpayer to pad the funding pool leading to increase reimbursements for 01:06 Medicaid for the providers. Yeah, if I'm a doctor or a health care facility, I'm saying sign me up to that. Yes, the medical industrial complex totally has your best interest in mind so go ahead and swallow up those vaccines like a good little comrade. Age me harder daddy. And speaking of comrades, do you know how many people in this country receive Medicaid that shouldn't? Before you start screaming, everyone should get free health care. Not the argument here. We do not have universal health care in the United States. It doesn't work and since we don't have it, that means someone is paying for it and guess what? There are lower-income families 01:37 who don't qualify for the benefits but they're taxpayers and they're being burdened by this. Back to the point which is that the system is insanely abused. I used to do child support referee work for years and you would v

Detailed fact-check analysis of: Transcript 00:00 I cannot believe that Trump is cutting Medicaid. Actually, what I meant to say is that I can't believe he's not cutting more of it because medicaid is a money laundering scheme for your government. Congratulations all you bleeding heart democrats. Instead of raging against the machine, you're bending over for it. Medicaid is jointly run by the states and the feds and for every one dollar that your state allocates to the program, the Feds turn around and match that at a level of one 00 percent so one dollar up to nine dollars. And this money comes from taxpayers in other 00:34 states. Your money has a 900% return rate at someone else's expense. Why wouldn't you expand the program? Thanks Obama. That's exactly how we wound up with way too many Medicaid recipients in the first place. Like everything related to healthcare the providers are in bed with the government on this one too because the government can tax the providers. 1. Use that dollar to collect the up to nine dollars in federal funds and to reimburse the provider their original dollar. What? Robbing the taxpayer to pad the funding pool leading to increase reimbursements for 01:06 Medicaid for the providers. Yeah, if I'm a doctor or a health care facility, I'm saying sign me up to that. Yes, the medical industrial complex totally has your best interest in mind so go ahead and swallow up those vaccines like a good little comrade. Age me harder daddy. And speaking of comrades, do you know how many people in this country receive Medicaid that shouldn't? Before you start screaming, everyone should get free health care. Not the argument here. We do not have universal health care in the United States. It doesn't work and since we don't have it, that means someone is paying for it and guess what? There are lower-income families 01:37 who don't qualify for the benefits but they're taxpayers and they're being burdened by this. Back to the point which is that the system is insanely abused. I used to do child support referee work for years and you would v

Jul 27, 2025
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Fact Check: Paul Krugman Paul Krugman We’re All Rats Now Time to take a stand, again, against racism Paul Krugman Jun 30, 2025 Zohran Mamdani’s upset victory in New York’s Democratic primary has created panic in MAGAland. Stephen Miller, the architect of Donald Trump’s deportation policies, waxed apocalyptic: Scott Bessent, the Treasury secretary, declared that New York is about to turn into “Caracas on the Hudson.” And Sen. Tommy Tuberville of Alabama basically declared New York’s voters subhuman, saying: These inner-city rats, they live off the federal government. And that’s one reason we’re $37 trillion in debt. And it’s time we find these rats and we send them back home, that are living off the American taxpayers that are working very hard every week to pay taxes. These reactions are vile, and they’re also dishonest. Whatever these men may claim, it’s all about bigotry. Miller isn’t concerned about the state of New York “society.” What bothers him is the idea of nonwhite people having political power. Bessent isn’t really deeply worried about Zamdani’s economic ideas. But he feels free, maybe even obliged, to slander a foreign-born Muslim with language he would never use about a white Christian politician, even if that politician were (like some of his colleagues in the Trump administration) a total crackpot. And while Tuberville stands out even within his caucus as an ignorant fool, his willingness to use dehumanizing language about millions of people shows that raw racism is rapidly becoming mainstream in American politics. Remember, during the campaign both Trump and JD Vance amplified the slanders about Haitians eating pets. And now that they’re in office, you can see the resurgence of raw racism all across Trump administration policies, large and small. You can see it, for example, in the cuts at the National Institutes of Health, which are so tilted against racial minorities that a federal judge — one appointed by Ronald Reagan! — declared I’ve never seen a record where racial discrimination was so palpable. I’ve sat on this bench now for 40 years. I’ve never seen government racial discrimination like this. You can see it in the renaming of military bases after Confederate generals — that is, traitors who fought for slavery. You can even see it in a change in the military’s shaving policy that is clearly custom-designed to drive Black men — who account for around a quarter of the Army’s new recruits — out of the service. So racism and bigotry are back, big time. Who’s safe? Nobody. Are you a legal immigrant? Well, the Supreme Court just allowed Trump to summarily strip half a million U.S. residents of that status, and only a fool would imagine that this is the end of the story. Anyway, when masked men who claim to be ICE agents but refuse to show identification are grabbing people off the streets because they think those people look illegal, does legal status even matter? Does it even matter if you’re a U.S. citizen? And the One Big Beautiful Bill Act is set to massively increase ICE’s funding — basically setting up a huge national secret police force. Now, maybe you imagine that you yourself won’t suffer from this new reign of bigotry and imagine that everyone you care about is similarly safe. But if that’s what you think, you’re likely to face a rude awakening. I personally don’t have any illusions of safety. Yes, I’m a native-born white citizen. But my wife and her family are Black, and some of my friends and relatives are foreign-born U.S. citizens. Furthermore, I’m Jewish, and anyone who knows their history realizes that whenever right-wing bigotry is on the ascendant, we’re always next in line. Are there really people out there naïve enough to believe MAGA’s claims to be against antisemitism, who can’t see the transparent cynicism and dishonesty? The fact is that the Trump administration already contains a number of figures with strong ties to antisemitic extremists. The Great Replacement Theory, which has de facto become part of MAGA’s ideology, doesn’t just say that there’s a conspiracy to replace whites with people of color; it says that it’s a Jewish conspiracy. So I’m definitely scared of what the many antisemites inside or with close ties to the Trump administration may eventually do. And no, I’m not frightened at all by the prospect that New York may soon have a somewhat leftist Muslim mayor. Anyway, my personal fears are beside the point. Everyone who cares about keeping America America needs to take a stand against the resurgence of bigotry. Because the truth is that we’re all rats now. MUSICAL CODA Discussion about this post Michael Roseman Jun 30 Edited For a while, American bigotry was ashamed of itself. Or pretended to be. Now it runs the government. Reply Share 106 replies Megan Rothery Jun 30 Edited Take a stand - Call. Write. Email. Protest. Unrelentingly. Use/share this spreadsheet as a resource to call/email/write members of Congress, the Cabinet and news organizations. Reach out to those in your own state, as well as those in others. Use your voice and make some “good trouble” ❤️‍🩹🤍💙 https://docs.google.com/spreadsheets/d/13lYafj0P-6owAJcH-5_xcpcRvMUZI7rkBPW-Ma9e7hw/edit?usp=drivesdk Reply Share 31 replies 852 more comments... No posts Ready for more? © 2025 Paul Krugman Privacy ∙ Terms ∙ Collection notice Start writing Get the app Substack is the home for great culture

Detailed fact-check analysis of: Paul Krugman Paul Krugman We’re All Rats Now Time to take a stand, again, against racism Paul Krugman Jun 30, 2025 Zohran Mamdani’s upset victory in New York’s Democratic primary has created panic in MAGAland. Stephen Miller, the architect of Donald Trump’s deportation policies, waxed apocalyptic: Scott Bessent, the Treasury secretary, declared that New York is about to turn into “Caracas on the Hudson.” And Sen. Tommy Tuberville of Alabama basically declared New York’s voters subhuman, saying: These inner-city rats, they live off the federal government. And that’s one reason we’re $37 trillion in debt. And it’s time we find these rats and we send them back home, that are living off the American taxpayers that are working very hard every week to pay taxes. These reactions are vile, and they’re also dishonest. Whatever these men may claim, it’s all about bigotry. Miller isn’t concerned about the state of New York “society.” What bothers him is the idea of nonwhite people having political power. Bessent isn’t really deeply worried about Zamdani’s economic ideas. But he feels free, maybe even obliged, to slander a foreign-born Muslim with language he would never use about a white Christian politician, even if that politician were (like some of his colleagues in the Trump administration) a total crackpot. And while Tuberville stands out even within his caucus as an ignorant fool, his willingness to use dehumanizing language about millions of people shows that raw racism is rapidly becoming mainstream in American politics. Remember, during the campaign both Trump and JD Vance amplified the slanders about Haitians eating pets. And now that they’re in office, you can see the resurgence of raw racism all across Trump administration policies, large and small. You can see it, for example, in the cuts at the National Institutes of Health, which are so tilted against racial minorities that a federal judge — one appointed by Ronald Reagan! — declared I’ve never seen a record where racial discrimination was so palpable. I’ve sat on this bench now for 40 years. I’ve never seen government racial discrimination like this. You can see it in the renaming of military bases after Confederate generals — that is, traitors who fought for slavery. You can even see it in a change in the military’s shaving policy that is clearly custom-designed to drive Black men — who account for around a quarter of the Army’s new recruits — out of the service. So racism and bigotry are back, big time. Who’s safe? Nobody. Are you a legal immigrant? Well, the Supreme Court just allowed Trump to summarily strip half a million U.S. residents of that status, and only a fool would imagine that this is the end of the story. Anyway, when masked men who claim to be ICE agents but refuse to show identification are grabbing people off the streets because they think those people look illegal, does legal status even matter? Does it even matter if you’re a U.S. citizen? And the One Big Beautiful Bill Act is set to massively increase ICE’s funding — basically setting up a huge national secret police force. Now, maybe you imagine that you yourself won’t suffer from this new reign of bigotry and imagine that everyone you care about is similarly safe. But if that’s what you think, you’re likely to face a rude awakening. I personally don’t have any illusions of safety. Yes, I’m a native-born white citizen. But my wife and her family are Black, and some of my friends and relatives are foreign-born U.S. citizens. Furthermore, I’m Jewish, and anyone who knows their history realizes that whenever right-wing bigotry is on the ascendant, we’re always next in line. Are there really people out there naïve enough to believe MAGA’s claims to be against antisemitism, who can’t see the transparent cynicism and dishonesty? The fact is that the Trump administration already contains a number of figures with strong ties to antisemitic extremists. The Great Replacement Theory, which has de facto become part of MAGA’s ideology, doesn’t just say that there’s a conspiracy to replace whites with people of color; it says that it’s a Jewish conspiracy. So I’m definitely scared of what the many antisemites inside or with close ties to the Trump administration may eventually do. And no, I’m not frightened at all by the prospect that New York may soon have a somewhat leftist Muslim mayor. Anyway, my personal fears are beside the point. Everyone who cares about keeping America America needs to take a stand against the resurgence of bigotry. Because the truth is that we’re all rats now. MUSICAL CODA Discussion about this post Michael Roseman Jun 30 Edited For a while, American bigotry was ashamed of itself. Or pretended to be. Now it runs the government. Reply Share 106 replies Megan Rothery Jun 30 Edited Take a stand - Call. Write. Email. Protest. Unrelentingly. Use/share this spreadsheet as a resource to call/email/write members of Congress, the Cabinet and news organizations. Reach out to those in your own state, as well as those in others. Use your voice and make some “good trouble” ❤️‍🩹🤍💙 https://docs.google.com/spreadsheets/d/13lYafj0P-6owAJcH-5_xcpcRvMUZI7rkBPW-Ma9e7hw/edit?usp=drivesdk Reply Share 31 replies 852 more comments... No posts Ready for more? © 2025 Paul Krugman Privacy ∙ Terms ∙ Collection notice Start writing Get the app Substack is the home for great culture

Jul 20, 2025
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Fact Check: The Senate version of the tax bill proposes permanently extending the $10,000 state and local tax deduction (SALT), while the House bill seeks to increase it to $40,000 for households earning up to $500,000.
Partially True

Fact Check: The Senate version of the tax bill proposes permanently extending the $10,000 state and local tax deduction (SALT), while the House bill seeks to increase it to $40,000 for households earning up to $500,000.

Detailed fact-check analysis of: The Senate version of the tax bill proposes permanently extending the $10,000 state and local tax deduction (SALT), while the House bill seeks to increase it to $40,000 for households earning up to $500,000.

Jun 17, 2025
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Fact Check: We have 50 years of data that tells us what corporations do with tax cuts. This has been one of the most studied things by universities around the world for the last 50 years. And in the last 50 years across 18 of the wealthiest nations in the world not one has corporate tax cuts equated to higher job growth. 00:35 Not once. Or we can just look at the Trump tax cuts passed in twenty 17. Donald Trump created 40, 000 less jobs a month than Barack Obama did. And oh by the way that's leaving out COVID. That's leaving out all the job losses from the pandemic. There is one thing that happens when you give corporations big tax breaks. This right here. 50 years of data. You see that red line on top? That's the rich getting richer. You see those two lines on the bottom? That's the bottom 905percent? No In 01:06 twenty 18 corporations spent over a trillion dollars on stock buybacks and created less jobs than they did in twenty fourteen, 15, 16, and seventeen. You see the rich can afford to pump all of this misinformation into your brain. And that's why you believe it. There's not a single case in history of tax cuts for the rich helping an economy in any way shape or form.
Partially True

Fact Check: We have 50 years of data that tells us what corporations do with tax cuts. This has been one of the most studied things by universities around the world for the last 50 years. And in the last 50 years across 18 of the wealthiest nations in the world not one has corporate tax cuts equated to higher job growth. 00:35 Not once. Or we can just look at the Trump tax cuts passed in twenty 17. Donald Trump created 40, 000 less jobs a month than Barack Obama did. And oh by the way that's leaving out COVID. That's leaving out all the job losses from the pandemic. There is one thing that happens when you give corporations big tax breaks. This right here. 50 years of data. You see that red line on top? That's the rich getting richer. You see those two lines on the bottom? That's the bottom 905percent? No In 01:06 twenty 18 corporations spent over a trillion dollars on stock buybacks and created less jobs than they did in twenty fourteen, 15, 16, and seventeen. You see the rich can afford to pump all of this misinformation into your brain. And that's why you believe it. There's not a single case in history of tax cuts for the rich helping an economy in any way shape or form.

Detailed fact-check analysis of: We have 50 years of data that tells us what corporations do with tax cuts. This has been one of the most studied things by universities around the world for the last 50 years. And in the last 50 years across 18 of the wealthiest nations in the world not one has corporate tax cuts equated to higher job growth. 00:35 Not once. Or we can just look at the Trump tax cuts passed in twenty 17. Donald Trump created 40, 000 less jobs a month than Barack Obama did. And oh by the way that's leaving out COVID. That's leaving out all the job losses from the pandemic. There is one thing that happens when you give corporations big tax breaks. This right here. 50 years of data. You see that red line on top? That's the rich getting richer. You see those two lines on the bottom? That's the bottom 905percent? No In 01:06 twenty 18 corporations spent over a trillion dollars on stock buybacks and created less jobs than they did in twenty fourteen, 15, 16, and seventeen. You see the rich can afford to pump all of this misinformation into your brain. And that's why you believe it. There's not a single case in history of tax cuts for the rich helping an economy in any way shape or form.

Jul 30, 2025
Read more →
Fact Check: House Republicans rejected extending premium tax credit enhancements beyond 2025.
Needs Research

Fact Check: House Republicans rejected extending premium tax credit enhancements beyond 2025.

Detailed fact-check analysis of: House Republicans rejected extending premium tax credit enhancements beyond 2025.

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Fact Check: Extending tax cuts can significantly increase the federal deficit. | TruthOrFake Blog