Accounting
Trump’s tax cuts may fail to drive much economic boost
President-elect Donald Trump says renewing tax cuts would turbo-charge investment and boost U.S. economic growth — a pledge that helped propel him to election victory in November.
But new
Most of the measures up for renewal largely benefit individuals and households, including lower income tax rates and an expanded child tax credit. While those are an easy sell to voters, economists caution on the scale of economic dividend they generate. The bigger spur for investment, they say, would be cuts for corporations.
The business tax breaks in the 2017 law Trump signed in his first term aren’t up for renewal. While he vowed to donors and business leaders gathered at the New York Stock Exchange on Thursday that he’d lower the corporate rate to 15%, that pledge is seen as a potentially perilous move with both voters and some Republicans disdainful of more aid for big business.
The CRFB based its findings on an
Those bigger revenues would mean less public borrowing, in turn offering a spur to private investment. In the CBO’s analysis, that would help make up for a modest reduction in the labor force from the expiration of the tax cuts. “On net, those two effects largely offset each other, resulting in very small changes to gross domestic product,” the CBO said.
That CBO analysis implies that renewing the tax cuts would also have a similar, modest net effect on growth, in the CRFB’s thinking.
Spending restraint?
Some other models, including those from the Tax Foundation and the Penn-Wharton Budget Model, have shown small amounts of positive economic feedback from renewing the tax cuts — but nowhere near enough to cover the cost of extending the tax cuts, which the CBO projects would amount to $4.6 trillion over a decade.
Still, the outlook from both the CRFB and CBO adds to doubts about the ultimate economic gains, and underscores the pressure lawmakers will be under to find savings to fund the tax cuts.
Trump has touted swingeing spending cuts, through a proposed Department of Government Efficiency — a nonprofit group to be run by billionaire Elon Musk and entrepreneur Vivek Ramaswamy looking to come up with ideas for deep savings in public outlays. In addition, the president-elect has talked of imposing a tariff of 10% to 20% on all imported goods plus 60% on Chinese products, and promoted that as an offset for tax cuts.
That comes as the fiscal backdrop continues to deteriorate.
The U.S. budget deficit
Since then, new figures show the U.S. ran a $624 billion deficit in the first two months of the current fiscal year, equating to borrowing of $10 billion per day — or $2.1 trillion on a rolling basis over the past 12 months,
“That’s an astonishing sum especially when considering the huge challenges ahead,” according to Maya MacGuineas, president of the CRFB. “If we intend to get serious about fiscal responsibility, we might as well start now.”
GOP priorities
Extending the tax cuts are only one part of Trump’s fiscal platform, which includes plans to slash other taxes across the board — such as those on tips and overtime pay, along with the corporate-rate reduction.
Investors are watching closely for any signs of emerging fiscal stress. While Wall Street economists say extending the tax cuts would be positive for growth, they caution there are other dynamics at play too.
“It would be crucial for Trump 2.0 and Congress to complement the tax cuts with spending cuts,” said Stephen Jen, chief executive of Eurizon SLJ Capital. “It’s not just about tax cuts, it should be about a small government, which means lower spending.”
That means there’s less room for broader tax easing given the worsening fiscal outlook, according to David Seif, chief economist for developed markets at Nomura.
“If I’m wrong and there are further tax cuts, I doubt that there will truly be many pay-fors. I would instead expect reconciliation instructions to allow for a larger deficit,” he said, referring to the budget reconciliation process that Republicans are planning to use to pass the tax legislation, which will allow them to bypass the need for any Democratic support.
However the debate plays out, the underlying economic landscape of lingering inflation, a surging deficit and potential for slower economic growth all stack up to a very different starting point to the last time major tax cuts were debated. Martha Gimbel, executive director of The Budget Lab at Yale and a former White House economist under President Joe Biden, said that makes for an uncertain outcome.
“Policymakers need to remember that 2024 is not 2017,” she said. “Similar actions could see very different results.”
Jody Padar, an author and speaker known as “The Radical CPA,” and Katie Tolin, a growth strategist for CPAs, together launched a training and technology platform called XcelLabs.
XcelLabs provides solutions to help accountants use artificial technology fluently and strategically. The Pennsylvania Institute of CPAs and CPA Crossings joined with Padar and Tolin as strategic partners and investors.
“To reinvent the profession, we must start by training the professional who can then transform their firms,” Padar said in a statement. “By equipping people with data and insights that help them see things differently, they can provide better advice to their clients and firm.”
The platform includes XcelLabs Academy, a series of educational online courses on the basics of AI, being a better advisor, leadership and practice management; Navi, a proprietary tool that uses AI to help accountants turn unstructured data like emails, phone calls and meetings into insights; and training and consulting services. These offerings are currently in beta testing.
“Accountants know they need to be more advisory, but not everyone can figure out how to do it,” Tolin said in a statement. “Couple that with the fact that AI will be doing a lot of the lower-level work accountants do today, and we need to create that next level advisor now. By showing accountants how to unlock patterns in their actions and turn client conversations into emotionally intelligent advice, we can create the accounting professional of the future.”
“AI is transforming how CPAs work, and XcelLabs is focused on helping the profession evolve with it,” PICPA CEO Jennifer Cryder said in a statement. “At PICPA, we’re proud to support a mission that aligns so closely with ours: empowering firms to use AI not just for efficiency, but to drive growth, value and long-term relevance.”
The accountant the world urgently needs has evolved far beyond the traditional role we recognized just a few years ago.
The transformation of the accounting profession is not merely an anticipated change; it is a pressing reality that is currently shaping business decisions, academic programs and the expected contributions of professionals. Yet, in many areas, accounting education stubbornly clings to outdated, overly technical models that fail to connect with the actual demands of the market. We must confront a critical question: If we continue to train accountants solely to file tax reports, are we truly equipping them for the challenges of today’s world?
This shift in mindset extends beyond individual countries or educational systems; it is a global movement. The recent announcement of the
The CIMA/CGMA proposal for 2026 is not just a curriculum update; it is a powerful manifesto. This new program positions analytical thinking, strategic business partnering and technology application at the core of accounting education. It unequivocally highlights sustainability, aligning with IFRS S1 and S2, and expands the accountant’s responsibilities beyond mere numbers to encompass conscious leadership, environmental impact and corporate governance.
The current changes in the accounting profession underscore an urgent shift in expectations from both educators and employers. Today, companies of all sizes and industries demand accountants who can do far more than interpret balance sheets. They expect professionals who grasp the deeper context behind the numbers, identify inconsistencies, anticipate potential issues before they escalate into losses, and act decisively as a bridge between data and decision making.
To meet these expectations, a radical mindset shift is essential. There are firms still operating on autopilot, mindlessly repeating tasks with minimal critical analysis. Likewise, many academic programs continue to treat accounting as purely a technical discipline, disregarding the vital elements of reflection, strategy and behavioral insight. This outdated approach creates a significant mismatch. While the world forges ahead, parts of the accounting profession remain stuck in the past.
The consequences of this shift are already becoming evident. The demand for compliance, transparency and sustainability now applies not only to large corporations but also to small and mid-sized businesses. Many of these organizations rely on professionals ill-equipped to drive the necessary changes, putting both business performance and the reputation of the profession at risk.
The positive news is that accountants who are ready to thrive in this new era do not necessarily need additional degrees. What they truly need is a commitment to awareness, a dedication to continuous learning, and the courage to step beyond their comfort zones. The future of accounting is here, and it is firmly rooted in analytical, strategic and human-oriented perspectives. The 2026 curriculum is a clear indication of the changes underway. Those who fail to think critically and holistically will be left behind.
In contrast, accountants who see the big picture, understand the ripple effects of their decisions, and actively contribute to the financial and ethical health of organizations will undeniably remain indispensable, anywhere in the world.
Congressional Republicans are siding with Donald Trump in the messy divorce between the president and Elon Musk, an optimistic sign for eventual passage of a tax cut bill at the root of the two billionaires’ public feud.
Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. Musk, the biggest political donor of the 2024 cycle, has threatened to help primary anyone who votes for the legislation, but lawmakers are betting that staying in the president’s good graces is the safer path to political survival.
“The tax bill is not in jeopardy. We are going to deliver on that,” House Speaker Mike Johnson told reporters on Friday.
“I’ll tell you what — do not doubt, don’t second guess and do not challenge the President of the United States Donald Trump,” he added. “He is the leader of the party. He’s the most consequential political figure of our time.”
A fight between Trump and Musk exploded into public view this week. The sparring started with the tech titan calling the president’s tax bill a “disgusting abomination,” but quickly escalated to more personal attacks and Trump threatening to cancel all federal contracts and subsidies to Musk’s companies, such as Tesla Inc. and SpaceX which have benefitted from government ties.
Republicans on Capitol Hill, who had — until recently — publicly embraced Musk, said they weren’t swayed by the billionaire’s criticism that the bill cost too much. Lawmakers have refuted official estimates of the package, saying that the tax cuts for households, small businesses and politically important groups — including hospitality and hourly workers — will generate enough economic growth to offset the price tag.
“I don’t tell my friend Elon, I don’t argue with him about how to build rockets, and I wish he wouldn’t argue with me about how to craft legislation and pass it,” Johnson told CNBC earlier Friday.
House Budget Committee Chair Jodey Arrington told reporters that House lawmakers are focused on working with the Senate as it revises the bill to make sure the legislation has the political support in both chambers to make it to Trump’s desk for his signature.
“We move past the drama and we get the substance of what is needed to make the modest improvements that can be made,” he said.
House fiscal hawks said that they hadn’t changed their prior positions on the legislation based on Musk’s statements. They also said they agree with GOP leaders that there will be other chances to make further spending cuts outside the tax bill.
Representative Tom McClintock, a fiscal conservative, said “the bill will pass because it has to pass,” adding that both Musk and Trump needed to calm down. “They both need to take a nap,” he said.
Even some of the House bill’s most vociferous critics appeared resigned to its passage. Kentucky Representative Thomas Massie, who voted against the House version, predicted that despite Musk’s objections, the Senate will make only small changes.
“The speaker is right about one thing. This barely passed the House. If they muck with it too much in the Senate, it may not pass the House again,” he said.
Trump is pressuring lawmakers to move at breakneck speed to pass the tax-cut bill, demanding they vote on the bill before the July 4 holiday. The president has been quick to blast critics of the bill — including calling Senator Rand Paul
As the legislation worked its way through the House last month, Trump took to social media to criticize holdouts and invited undecided members to the White House to compel them to support the package. It passed by one vote.
Senate Majority Leader John Thune — who is planning to unveil his chamber’s version of the bill as soon as next week — said his timeline is unmoved by Musk.
“We are already pretty far down the trail,” he said.
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