It was the selling line for the whole law, repeated until it sounded like a fact. "Hopefully, all Senate Republicans will vote for the largest Tax Cuts in U.S. history," the president posted in 2017. [1] The bill passed. The superlative did not survive contact with the record books, which are kept in a way that does not care how a thing was marketed.
How you actually measure a tax cut
There is a standard way to size a tax cut, and it is not the raw dollar figure, because a dollar in 1925 and a dollar today are not the same dollar. Economists measure it against the size of the economy, as a share of gross domestic product, which lets you compare across decades. By that measure the 2017 law ranks eighth since 1918. [1][2] Even counted generously, in inflation-adjusted dollars, it comes in fourth. [1] Eighth or fourth is a long way from first.
The record nobody beat
The actual record holder is not recent. Ronald Reagan's 1981 tax cut, at about 2.9 percent of GDP, still sits at the top of the list. [1][2] The 2017 law cost somewhere between 1.45 and 2.4 trillion dollars over ten years; to pass Reagan, it would have had to cost roughly 6.8 trillion. [1] The claim was not off by a rounding error. To make it true, the bill would have needed to be about three times the size it actually was.
THE BOTTOM LINE
- "The largest Tax Cuts in U.S. history": False [1]
- 2017 law: 8th largest as a share of GDP since 1918 [1][2]
- The record holder is Reagan's 1981 cut, about 2.9 percent of GDP [1][2]
You can think the 2017 tax cut was good policy or bad policy; that is a real argument with real numbers on both sides. What you cannot do is call it the biggest in history when, by the measure economists actually use, seven others were bigger. The marketing said number one. The ledger says number eight.
