Tax cuts have an immediate effect but have a negative effect in the long run and now the debt is ballooning in part because of those tax cuts. The tax cuts were not offset by corresponding spending cuts, which meant the U.S. government had to borrow more. Estimates from the Congressional Budget Office (CBO) suggest the TCJA could add roughly $1.9 trillion to the national debt over a decade. This increase in debt has long-term implications, as it can lead to higher interest costs, constrain future government spending, and potentially limit the government's ability to respond to future economic crises.
The tax cuts simply enriched those who were already wealthy. Although the tax cuts reduced the corporate tax rate from 35% to 21%, many corporations used their tax savings to buy back shares rather than invest in long-term productive assets, research, or job creation. While stock buybacks boost share prices (benefiting shareholders), they do little to foster sustained economic growth. This allocation of corporate resources primarily benefits wealthier shareholders rather than the broader economy.
The Trump tax cuts provided short-term benefits for corporations and wealthy individuals, with some gains for middle-income earners. However, the long-term drawbacks include a higher national debt, increased inequality, and potential challenges to the stability of social safety nets, all of which could weigh down economic growth and financial security in the future.