Will the tax cuts pay for themselves?

The Indicator from Planet Money

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🗓️ 8 July 2025

⏱️ 8 minutes

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Summary

The One Big Beautiful Bill Act is now law. It's expected to cost the government a pretty penny. The Congressional Budget Office predicts a $3.4 trillion increase in the deficit over ten years. This is driven by significant tax cuts, including extensions of those made in 2017.

Trump's advisors argue the tax cuts will pay for themselves. Today on the show, we speak with the guru on that school of thought, Arthur Laffer, and dig into some of those claims with a tax economist.

Related episodes:
The simple math of the big bill (Apple / Spotify)
What's going to happen to the Trump tax cuts? (Apple / Spotify)
So, how's this No Tax On Tips thing gonna go? (Apple / Spotify)

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Transcript

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0:00.0	NPR.
0:02.0	As we were all putting coals on the barbecue and listening to the crackle of fireworks last week,
0:17.4	it was hard to avoid the news that President Trump's one big beautiful bill act
0:22.9	became law.
0:24.6	What is notably big about it is how much it will cost the government.
0:29.3	$3.4 trillion over 10 years, according to the Congressional Budget Office.
0:34.8	The pricest section is extending a lot of the 2017 tax cuts and adding some new
0:41.2	ones. But the Trump administration's Council of Economic Advisers says the cost is actually much,
0:46.7	much lower. In fact, it says the tax cuts will pretty much pay for themselves. This is a multi-trillion
0:54.1	dollar difference in opinion.
0:56.3	And it's one you hear echoed by some Republican lawmakers.
0:59.4	So we wanted to investigate this claim.
1:02.5	This is the indicator from Planet Money.
1:04.5	I'm Waylon Wong.
1:05.8	And I'm Darian Woods.
1:07.0	Today on the show, can the tax cuts pay for themselves?
1:10.4	We talk to the guru of the school of thought, Arthur Laffer,
1:14.7	and we fact-checked those claims were the tax economist.
1:21.9	A big part of the bill passed last week was the extension of the 2017 tax cuts
1:26.8	from the first Trump administration.
1:29.1	There were a lot of tax changes back then, but just to give you a flavor, the top personal
1:34.1	income tax dropped a few percentage points to 37%. The standard deduction increased a lot too,
	...

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