Whitehouse: Republicans’ fixation on tax cuts for billionaires is driving up the national debt
More than 60 percent of the increase in the annual deficit was due to a drop in individual and corporate tax revenues
Washington, D.C.—Today, the U.S. Department of the Treasury released a statement on the Fiscal Year 2023 budget results.
According to the statement, federal revenues fell to 16.5 percent of GDP last fiscal year, down from 19.3 percent in 2022. Revenues have only been that low six times since 1962 (not including the period immediately following the Great Recession). Even without the one-time drop in the deficit from the Supreme Court striking down President Biden’s student debt forgiveness plan, more than 60 percent of the increase in the annual deficit was due to a drop in individual and corporate tax revenues.
Tax giveaways for the wealthy are continuing to starve the federal government of needed revenue: those passed by former Presidents Trump and Bush have added $10 trillion to the debt and account for 57 percent of the increase in the debt-to-GDP ratio since 2001. If not for those tax cuts, U.S. debt would be declining as a share of the economy.
Senate Budget Chairman Sheldon Whitehouse (D-RI) issued the following statement:
“In their blind loyalty to their mega-donors, Republicans’ fixation on giant tax cuts for billionaires has created a revenue problem that is driving up our national debt. Even as federal spending fell over the last year relative to the size of the economy, the deficit increased because Republicans have rigged the tax code so that big corporations and the wealthy can avoid paying their fair share.
“Fixing our corrupted tax code and cracking down on wealthy tax cheats would help bring down the deficit. It would also ensure teachers and firefighters don’t pay higher tax rates than billionaires, level the playing field for small businesses, and promote a stronger economy for all.”
Chairman Whitehouse has long sought to un-rig the U.S. tax code and ensure big corporations and the wealthy pay their fair share. This week, he slammed Republicans’ latest effort to defund the Internal Revenue Service’s (IRS) ability to go after wealthy tax cheats. Stripping IRS funding would reduce federal revenues by $49 billion over the next 10 years and add $24 billion to the deficit, according to the nonpartisan Congressional Budget Office (CBO).
The Budget Committee has also held hearings this Congress on the costs of tax avoidance by the wealthy and big corporations and how the Bush and Trump tax cuts have been the primary drivers of the increase in the debt as a share of the economy. According to a recent CBO report, written at the urging of Chairman Whitehouse and Senate Finance Chairman Ron Wyden (D-OR), making the Trump tax cuts permanent—as Republicans continue to call for—would add $3.5 trillion to the deficit. Other Budget Committee hearings have made clear that ensuring big corporations and the wealthy pay their fair share would protect Medicare and Social Security forever—without cutting benefits.
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