Trump's Tax Cuts: The Accounting Maneuver That Could Make Them Seem Free

As the debate over extending Trump's tax cuts heats up, Republicans are exploring creative accounting maneuvers to make the cost of these extensions appear negligible. One such maneuver is to use a "current policy baseline," which argues that extending current tax law should not officially count as costing more than $4 trillion. This approach, advocated by Sen. Mike Crapo, the chairman of the Senate Finance Committee, essentially treats the extension of the tax cuts as a continuation of the status quo, rather than a new policy initiative with associated costs.

However, the effectiveness of this maneuver in the long term is questionable. The Treasury Department's analysis found that fully extending the expiring individual and estate tax provisions of the 2017 law would cost $4.2 trillion between 2026 and 2035. This cost is significant and would have real-world implications for the federal budget and the national debt. By using a current policy baseline, Republicans may be able to temporarily obscure the true cost of extending the tax cuts, but they cannot change the fact that these policies have a substantial impact on the federal budget.

Moreover, using a current policy baseline could be seen as a political maneuver rather than a genuine attempt to address the fiscal implications of extending the tax cuts. This approach may not be well-received by the public or by fiscal conservatives who are concerned about the long-term sustainability of the federal budget. In the long term, the true cost of extending the tax cuts will still need to be addressed, and using a current policy baseline may not be an effective way to do so.

In conclusion, while using a current policy baseline may help to make the cost of extending Trump's tax cuts appear negligible in the short term, this maneuver is unlikely to be effective in the long term. The true cost of these policies will still need to be addressed, and using a current policy baseline may not be a sustainable or responsible way to do so.