The phrase has a nice ring and a long history: cut taxes, especially on corporations and the wealthy, and the growth that follows will be so strong the cuts fund themselves. Supply-side boosters made exactly that promise about the 2017 Tax Cuts and Jobs Act, from White House economists to cable regulars like Larry Kudlow and Stephen Moore. [4] The useful thing about a claim that specific is that it can be checked. The Congressional Budget Office checked it. The cuts did not pay for themselves, and it is not close.
What the scorekeeper found
Start with the price tag, because the CBO publishes one. The 2017 law was projected to add roughly $1.9 trillion to federal deficits over a decade, even after accounting for the growth it was expected to generate. [1] Revenue did not surge to fill the hole. Federal receipts as a share of the economy fell after the cuts took effect, the opposite of what paying for itself would require, and the deficit widened during an economic expansion, the stretch when it normally shrinks. [1][4] The bill came due. Nobody grew their way out of it.
The promise, measured
The boosters did not only promise the cuts were free. They promised the money would land in your paycheck. The White House Council of Economic Advisers projected that the corporate tax cut would lift the typical household's income by $4,000 to $9,000 a year. [2] The actual first-year change in real median household income was $553, an increase the Census Bureau described as statistically insignificant. [2] Business investment, the engine the whole theory runs on, grew more slowly in the quarters after the cut than in the quarters before it. [2]
Data
| Promised (low end) | 4000 |
|---|---|
| Actually delivered, year 1 | 553 |
Why the claim keeps coming back
A theory this thoroughly tested should be settled, and on the evidence it is. [1][2] The claim survives anyway because it is useful: "the cuts pay for themselves" turns a transfer to shareholders and the wealthy into a gift to everyone, and it reappears every time another round of cuts needs selling. The current push to extend the 2017 provisions carries its own CBO score, roughly $4.6 trillion added to the deficit over ten years. [3] Same promise, same scorekeeper, same answer waiting. The honest version is not that tax cuts are never worth it. It is that they cost what they cost, the bill goes on the national credit card, and "they pay for themselves" is the line you reach for when you would rather not say who actually pays.
You do not have to take my word for any of this, which is the entire point of having a scorekeeper. The CBO numbers are public, the Census income figure is public, and both say what the last several rounds of this said. [1][2] A tax cut can still be a choice worth making. It is just never a free one.
