Donald Trump’s schemes to juice the economy

Watch out for sneaky stimulus

Photograph: Reuters

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D onald Trump knows well that American voters tend not to reward subtlety. But in one respect the president, during his first term in office, managed to hide his light under a bushel. Republicans often gripe that the bumper tax cuts they implemented then did little to prevent an electoral drubbing at the midterms in 2018. This was because, though cumulatively large, the tax cuts arrived in dribs and drabs, and voters barely seemed to notice. Again and again, Republicans insisted that “the proof is in the paycheque”, to little avail. Even Paul Ryan, then speaker of the House of Representatives and a chief architect of the cuts, failed to communicate their scale: he found himself pointing to piddling tweaks that would barely have covered a year’s membership at Costco, a popular superstore.

Republicans are determined not to repeat this mistake. With the president’s approval ratings looking dismal and unpopular cuts to health-care and welfare spending on their way, they face an uphill battle to retain control of the House of Representatives in November’s midterm elections. On the other side of the ledger, however, they can point to a series of tax cuts set to arrive not gradually, but in one giant slug.

Americans can expect jumbo-sized refund cheques after the tax-filing season wraps up in April. The average taxpayer in 2026 will get $3,800backfromthegovernment,comparedwith$3,000 over the past two filing seasons, estimates the Tax Foundation, a think-tank. On top of that will be plenty of headline-grabbers such as “no tax on tips” and “no tax on overtime”.

Chart: The Economist

Even these are just the most visible side of the White House’s efforts to juice the economy and make Americans feel richer. Beyond the bazooka of the One Big Beautiful Bill Act, Mr Trump has an array of subtler weapons. They are not conventional stimulus measures, and are certainly not targeted at the neediest. Instead, these backdoor efforts to dump more cash into the economy will reward a handful of Mr Trump’s favoured constituencies.

Most dramatic is the decision to gut the tax-enforcing powers of the Internal Revenue Service (IRS). Joe Biden increased the agency’s staff by 20,000 during his presidency, which almost certainly helped swell tax revenues. Mr Trump has now reversed that (see chart 1). As a result, those who attempt to fiddle their taxes are more likely to get away with it. In a paper published in 2025, Nathaniel Hendren of the Massachusetts Institute of Technology and his co-authors estimated that $1spentimprovingtheIRS’scapacitytoauditrichertaxpayersyielded$12 in extra tax revenue.

Rattling the collection tin

The additional revenue that Mr Biden’s hiring spree might have gathered has now been forfeited. And chaos at the IRS might harm collections even more. A recent report by the inspector-general painted a hair-raising picture: lay-offs and the government shutdown in October and November had disrupted the agency, leaving it severely behind with preparations for the 2026 filing season. Backlogs of unprocessed tax returns have worsened. Hiring for filing season is well behind schedule. Research by the Yale Budget Lab estimates that the effect of 22,000 lay-offs at the IRS will be to lower revenues by around $10bnthisyearand$20bn by 2029.

Chart: The Economist

In a roundabout way, the shake-up at the IRS will put more money in Americans’ pockets—or at least those of people who are unscrupulous in their tax affairs. The members of this group tend to be wealthy, with the sorts of complicated tax returns that enable chicanery and the resources to exploit lax enforcement. The richest 5% of people are responsible for about half of all unpaid taxes, estimates the Yale Budget Lab (see chart 2).

Mr Trump’s administration is also taking aim at the regulations which determine how taxes are applied. In doing so it has given companies plenty of opportunities to pay less tax. The scope of levies on share buy-backs has been narrowed, and attempts to crack down on the use of complicated (and tax-avoiding) partnership structures have been rolled back. The Treasury Department has also nullified the Corporate Transparency Act, a law intended to make the workings of shell corporations more visible. Collectively, these changes could result in companies paying, at minimum, tens of billions of dollars less in tax over the next decade. Many of the biggest beneficiaries will be firms that already strain against legal boundaries in order to lower their tax bills.

The money they save will hit the economy, in a fashion. Lower tax revenues will mean a wider government deficit, and therefore more net spending being ploughed into America’s economy, even if tax breaks for firms and wealthy individuals do not raise aggregate spending as much as giveaways to less well-off taxpayers. That might contribute to a pre-election sugar rush and, eventually, a nasty inflationary hangover. With some of Mr Trump’s other policies—such as raising trade barriers and choking off immigration—constraining the economy’s supply side, stoking demand at the same time is especially dangerous. It will be all the more so if Kevin Warsh, Mr Trump’s nominee for chair of the Federal Reserve, persuades his fellow rate-setters to ease monetary policy.

A final boost to Mr Trump’s stimulus efforts might come from an unexpected quarter. The Supreme Court will soon rule on whether the “reciprocal” tariffs imposed on other countries by Mr Trump, using emergency economic powers, were unlawful. If the court rules against the president, it is possible that the bulk of the past year’s new tariff revenues, amounting to more than $100bn (0.3% of GDP), will have to be refunded. That cash would again land in the bank accounts of companies, rather than people, and so probably raise spending only gradually. Still, it would be a welcome silver lining for the president—even if it did involve his signature policy being struck down. ■

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논증 분석

유형: diagnosis

핵심 주장

Donald Trump은 공개적인 감세 정책 외에도 IRS 약화, 규제 완화, 관세 환급 가능성 등 은밀한 경기부양 수단을 동원하여 중간선거 전 경제를 띄우려 하고 있으나, 이는 부유층에 편향된 혜택과 인플레이션 위험을 수반한다.

논리구조

1. 전제: 2017년 첫 임기 당시 공화당의 대규모 감세가 점진적으로 지급되어 유권자들이 체감하지 못했고, 2018년 중간선거 참패의 원인이 되었다는 교훈이 있다.
2. 진단: 공화당은 2026년 중간선거를 앞두고 지지율 하락과 의료·복지 지출 삭감이라는 역풍에 맞서, 이번에는 대규모 세금 환급(평균 $3,800)과 ‘팁·초과근무 비과세’ 등 가시적 혜택을 한꺼번에 제공하는 전략을 구사하고 있다.
3. 논거: IRS 직원 약 22,000명을 해고하여 세무조사 역량을 약화시킴으로써, 세금 탈루 시도자—특히 복잡한 세금 신고가 가능한 부유층—가 처벌을 피할 가능성이 높아졌다. Yale Budget Lab은 이로 인해 올해 세수가 약 $100억,2029년까지$200억 감소할 것으로 추정한다.
4. 논거: 미납세액의 약 절반은 소득 상위 5%에 집중되어 있으므로(Yale Budget Lab 추정), IRS 약화로 인한 사실상의 경기부양 효과는 부유층에 불균형하게 귀속된다.
5. 논거: Trump 행정부는 자사주 매입 과세 범위 축소, 절세용 파트너십 구조 단속 철회, Corporate Transparency Act 무력화 등 규제 완화를 통해 기업들이 향후 10년간 최소 수백억 달러의 세금을 절감할 수 있도록 했다.
6. 논거: 세수 감소는 정부 적자를 확대시켜 미국 경제에 순지출을 추가 투입하는 효과를 낳는다. 다만 기업·고소득층 감세는 저소득층 대상 지원보다 총수요 진작 효과가 작다.
7. 반론: 관세 장벽 강화와 이민 제한 등 공급측 제약 정책과 동시에 수요를 자극하는 것은 인플레이션 위험을 특히 높이며, Kevin Warsh Federal Reserve 의장 후보가 금리 인하를 유도할 경우 이 위험은 더욱 가중된다.
8. 논거: Supreme Court가 Trump의 ‘상호 관세’ 부과가 불법이라고 판결할 경우, 지난 1년간 징수한 $1,000억 이상의 관세가 환급되어 추가적인 경기부양 효과가 발생할 수 있다. 다만 이 역시 기업에 귀속되어 소비 진작 효과는 점진적일 것이다.

결론

Trump의 은밀한 경기부양책은 선거 전 단기적 경제 호조를 만들 수 있지만, 부유층·기업 편향적 구조와 공급 제약 정책과의 병행으로 인해 인플레이션 후폭풍이라는 심각한 장기 위험을 초래할 수 있다.

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