Discussions are ongoing about extending individual tax cuts, but ways must be found to offset the revenue loss. If tariffs don’t generate sufficient revenue, lawmakers will have to look elsewhere.
American Enterprise Institute senior fellow Kyle Pomerleau joins Asking for a Trend to discuss extending individual tax cuts and the challenges of offsetting the associated costs.
"Even if the tariffs do happen, there are budgetary rules that limit lawmakers' ability to use that as an offset," Pomerleau explains. "So they're going to have to look at the tax code in order to offset the potential $4.8 trillion cost of extending the individual provisions."
"Ultimately, we're going to be looking at more debt and more borrowing, not less of it," he adds.
Additionally, Pomerleau notes how the smaller number of IRS employees could hamper tax collection.
"They're going to be saving a little bit of money on employee salaries, but on net, that's actually going to cost the federal government because if they're laying off workers that are in charge of auditing companies or auditing taxpayers that might not be paying taxes or might be underreporting their income, we're not going to get that revenue," Pomerleau says.
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This post was written by Josh Lynch