In a recent government meeting, discussions centered on the implications of the Tax Cuts and Jobs Act (TCJA) of 2017, particularly regarding its impact on federal revenue and spending. Participants highlighted that while the average revenue relative to GDP has historically hovered around 17%, current figures show a slight dip to 16%. This discrepancy raises concerns about the growing gap between revenue and federal spending, which currently stands at 23% of GDP.

One key point made during the meeting was the significant increase in federal revenue following the implementation of the TCJA. Revenue rose from $3.5 trillion before the tax cuts to approximately $4.5 trillion in the subsequent years, marking a notable increase attributed to the reduction of the corporate tax rate from 36% to 21%. This change has been credited with making the U.S. more attractive for investment, aligning its corporate tax rates with the global average.

Despite the increase in revenue, concerns were raised about the rising federal deficit, which has grown from $4.9 trillion in spending to $6.2 trillion. The discussion emphasized that the root cause of the deficit is excessive spending rather than insufficient taxation. Participants argued that the current tax structure disproportionately burdens the top earners, with the top 1% contributing 42% of all income taxes and the top 50% accounting for 97%. In contrast, the bottom 50% of earners contribute only 2.3%.

The meeting concluded with a call for spending cuts alongside any discussions of reauthorizing the TCJA, reflecting a desire for fiscal responsibility while navigating the complexities of tax policy and its implications for economic growth and equity.