Did Trump’s 2017 tax cuts actually pay for themselves?

Summary

Marketplace Morning Report: Did Trump’s 2017 Tax Cuts Actually Pay for Themselves?
Release Date: February 11, 2025

In this episode of Marketplace Morning Report, host David Brancaccio dives deep into the ongoing debate surrounding the Trump administration's 2017 tax cuts. The discussion explores whether these tax cuts have truly paid for themselves by stimulating economic growth or if the perceived benefits are merely a product of inflationary pressures. Additionally, the episode touches on Elon Musk's recent bid to acquire OpenAI and delves into Colossal's ambitious project to resurrect extinct species. Below is a detailed summary of the key topics, discussions, insights, and conclusions from the episode.

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1. Did Trump’s 2017 Tax Cuts Pay for Themselves?

Time Stamps: 00:33 - 02:27

David Brancaccio opens the discussion by questioning the efficacy of the 2017 tax cuts. As the expiration of key components approaches, there is significant interest from the Trump administration in making these tax cuts permanent. Supporters argue that the tax cuts have generated sufficient economic activity to offset their initial cost. However, Marketplace's Nancy Marshall Genzer presents a counterpoint.

• Nancy Marshall Genzer highlights that from 2018 to 2024, the federal government collected $1.5 trillion more than projected by the Congressional Budget Office (CBO), suggesting the tax cuts may have paid for themselves on the surface. (00:59)

• Maya McGinnis, president of the Committee for a Responsible Federal Budget, counters that two-thirds of the additional revenue stemmed directly from inflation. (01:13) She emphasizes that when adjusted for inflation, the real economic gains did not exceed expectations, implying that the tax cuts did not generate genuine economic growth. (01:22)

• Kimberly Clausing, a professor of tax law and policy at UCLA, adds that companies reported higher profits primarily because they raised prices due to soaring inflation, not because of increased productivity or expansion. (01:50) She notes, “They’re selling their goods for higher prices, but they haven't already adjusted the wages for their workers. So the revenues are going up, but the costs aren't going up as much as the revenues. So that can also drive higher corporate and business tax revenue.” (01:50)

• Clausing further points out a one-time boost in federal tax collection in 2022 from capital gains taxes on stock profits, which is unlikely to recur. (02:04)

• Conclusion: Nancy Marshall Genzer asserts that extending the 2017 tax cuts would not pay for themselves under current economic conditions. (02:27)

2. Elon Musk’s Bid to Acquire OpenAI

Time Stamps: 02:27 - 03:23

The episode shifts focus to technology and industry news, highlighting Elon Musk's recent offer to purchase OpenAI.

• A consortium of investors led by Elon Musk has proposed a $97 billion acquisition of OpenAI, the nonprofit organization behind ChatGPT. (02:27)

• Sam Altman, CEO of OpenAI, expressed disinterest in the offer but humorously suggested he might consider buying Twitter for $9.7 billion if Musk is interested. (02:27)

• Musk, who previously acquired Twitter for $44 billion, claims his motivation behind the OpenAI bid is to "keep AI safe and close to its nonprofit roots." (02:27)

• However, some analysts speculate that Musk's move could be a strategic distraction, allowing his team to develop competing AI technologies without immediate public scrutiny. (02:27)

• The discussion also briefly touches on the European Union's response to U.S. steel and aluminum tariffs, with Vice President J.D. Vance planning a meeting with EU Commission President Ursula von der Leyen. (02:27)

3. Colossal’s Ambitious De-Extinction Project

Time Stamps: 03:59 - 07:14

In an innovative twist, Marketplace brings in Ben Lamb, CEO and co-founder of Colossal, to discuss the company's groundbreaking efforts in resurrecting extinct species.

• David Brancaccio introduces the concept of "functional de-extinction," where Colossal aims to bring back core genes of extinct animals like woolly mammoths and dodo birds by integrating them into their closest living relatives. (03:59)

• Ben Lamb clarifies, “We are bringing back the core genes that made a mammoth a mammoth and also a dodo, a dodo and also a thylacine, a thylacine and engineering them into their closest living relatives... it's more accurate to say that we're doing functional de-extinction and de-extincting the core genes and lost biodiversity.” (04:24 - 04:47)

• The process involves extensive genomic research, utilizing 65 mammoth genomes dating back up to 700,000 years. Colossal engineers these genes into elephant cells, meticulously editing them to recreate the lost genetic traits. (04:57)

• When asked about fictional portrayals like "Jurassic Park," Lamb reassures that their approach is grounded in scientific rigor, focusing on collaboration with local governments, conservationists, ecologists, and indigenous groups to ensure responsible rewilding. (05:32 - 05:44)

• Lamb emphasizes the climate change implications, stating that reintroduced megafauna could help lower tundra ground temperatures by up to 8-9 degrees and enhance the nitrogen and oxygen cycles through their natural behaviors. (05:50)

• Regarding Colossal's business model, Lamb explains that the company plans to spin out technologies applicable to other industries, such as human healthcare and plastic degradation, thereby creating multiple revenue streams. (06:30 - 07:03)

• Ben Lamb concludes the interview by highlighting Colossal's valuation at $10 billion and their commitment to monetizing any technology that can address industrial and environmental challenges. (07:03 - 07:14)

4. Other Notable Mentions

Time Stamps: 07:14 - 07:37

• Google has updated its maps to label the body of ocean between Florida and Mexico as the Gulf of America, aligning with former President Trump's preference. (07:14)

• The episode briefly mentions Kai Ryssdal's show "How We Survive," which explores the U.S. military's role in shaping the future of climate technology. Topics include responses to extreme climate events, investments in sustainable aviation fuel, and the development of microgrids. (07:30)

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Conclusion:
This episode of Marketplace Morning Report offers a comprehensive analysis of the long-term impacts of the 2017 tax cuts, revealing that their perceived benefits are largely influenced by inflation rather than genuine economic growth. Additionally, the episode sheds light on Elon Musk's strategic maneuvers in the AI sector and highlights Colossal's innovative efforts to combine biotechnology with climate change mitigation. Listeners are provided with insightful discussions that challenge prevailing narratives and showcase cutting-edge advancements in technology and environmental science.

Transcript

[Ryan Reynolds]

Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment.

[Mint Mobile Representative]

Of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only, then full price plan options available. Taxes and fees extra. See full [e-mail] does lowering tax rates.

[David Brancaccio]

In practice pay for itself by generating more taxable economic activity? I'm David Brancaccio. Key parts of the 2017 tax cuts expire at the end of this year. The Trump administration's very interested in Congress making them permanent. But that could be expensive. Supporters of a tax cut extension say it would pay for itself. But would it? Did that happen back in 2017? Marketplace's Nancy Marshall Genzer takes a look.

[Nancy Marshall Genzer]

If you just look at the raw numbers, it does seem like the 2017 tax cuts paid for themselves. From 2018 to 2024, the federal government took in one and a half trillion dollars more than the Congressional Budget Office had projected.

[Maya McGinnis]

But about two thirds of that comes directly from inflation.

[Nancy Marshall Genzer]

Maya McGinnis is president of the Committee for a Responsible Federal Budget.

[Maya McGinnis]

But if you adjust it for inflation and look at the real numbers, there was no higher than expected gains.

[Nancy Marshall Genzer]

So she says the increased revenue didn't come from economic growth driven by the tax cuts. Companies did take in more revenue, but it was because with inflation soaring, they charged higher prices. Kimberly Closing, professor of tax law and policy at ucla, says businesses did report higher profits on their tax returns because.

[Kimberly Clausing]

They'Re selling their goods for higher prices, but they haven't already adjusted the wages for their workers. So the the revenues are going up, but the costs aren't going up as much as the revenues. So that can also drive higher corporate and business tax revenue.

[Nancy Marshall Genzer]

Clausing says federal tax collection also got a one time bump in 2022 as investors paid capital gains taxes on soaring stock profits from 2021. Clauzing doesn't think the stars will align this way again. So she says an extension of the 2017 tax cuts would not pay for itself. I'm Nancy Marshall Genser for Marketplace.

[David Brancaccio]

A group of investors led by Elon Musk has offered $97 billion to buy the nonprofit behind ChatGPT. OpenAI's CEO Sam Altman says he's very not interested, but trolled back that he might be willing to buy Twitter for 9.7 billion if you want. Musk purchased Twitter for 44 billion. Musk says the attempt to buy OpenAI is about keeping AI safe and close to its nonprofit roots. But some analys see a strategy to distract OpenAI as Musk's people work on competing tech of their own. We're watching for the European Union's response to U.S. steel and aluminum tariffs. Vice President J.D. vance plans to meet with the EU Commission President Ursula van der Leyen today.

[Elon Musk]

Foreign.

[Ryan Reynolds]

Reynolds here from Mint Mobile with a message for everyone paying Big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment.

[Mint Mobile Representative]

Of $45 for three month plan equivalent to $15 per month required intro rate first three months only, then full price plan available, taxes and fees extra. See full terms@mint mobile.com Experts on starting.

[David Brancaccio]

A business always say find a niche for a good or service and then fill it. In the case of a firm called Colossal, the service is trying to resurrect woolly mammoths, dodo birds and other extinct wildlife. Sounds like a movie plot. I thought it doesn't end well in that fictional case. But the real CEO and co founder of Colossal has a different view. Ben Lamb spoke with my colleague Nova Safo.

[Ben Lamb]

So you're not exactly bringing back the woolly mammoth. You're creating a new hybrid, is that right?

We are bringing back the core genes that made a mammoth a mammoth and also a dodo, a dodo and also a thylacine, a thylacine and engineering them into their closest living relatives. I think it's probably more accurate to say that we're doing functional de extinction and de extincting the core genes and lost biodiversity.

You're taking woolly mammoth genes and then adding in elephant genes to complete the puzzle to be able to incubate a new woolly mammoth.

What you described is kind of like been in movies. It's exactly opposite. So we use a lot of different algorithms and computer models to understand what genes really made a mammoth a mammoth. We have about 65 mammoth genomes ranging from about 3,500 years ago all the way back to 700,000 years. And then we engineer them into that of a living elephant cell. So we take an elephant cell and we've built a reference genome for the Asian elephant, elephant and other species of elephants. And then we do all the comparative genomics so that we can do very targeted editing in those cells to bring those lost genes back.

Ben, I gotta ask, have you seen Jurassic Park? Doesn't end well.

We have seen a fictional movie that was designed to entertain. I've also seen Blade Runner and Ready Player One, but I don't think that's happening either.

What would be the kind of climate change case that you've made for bringing that animal back?

So all the species that we're working on, we want to rewild back into their natural habitats in collaboration with local governments, conservationists, ecologists, and importantly indigenous people groups. There's about eight or nine peer reviewed papers that talk about the reintroduction of cold tolerant megafauna, specifically mammoth modeling and what it can do to the tundra in terms of lowering ground temperatures by up to 8 to 9 degrees, hopefully creating a faster nitrogen oxygen cycle with the foraging and defecation and migratory patterns of elephants. I think that, you know, once we have mammoths, we have to work on the process of rewilding them and ensure that we are managing the intended and unintended consequences from that.

I understand you're valued as a $10 billion startup. So what's the business model here? How do you intend to make money?

So we have a couple different models that are pretty interesting. Any technology that we have that could solve other industrial use cases or human healthcare, we spin out like the Apollo program that built a lot of core technologies, created trillions of dollars in economic value. So we've already spun out two businesses that we've announced publicly. One of them is Value and is doing quite well in the computational field of human healthcare. Another one's around plastic degradation. So anything that we can monetize, we will monetize.

Ben Lam is the CEO and co founder of Colossal, a company aiming to clone extinct animals, including the woolly mammoth. Ben, thank you very much for speaking with us today.

Yeah, thanks so much for having me.

[David Brancaccio]

And thanks to you. Nova. I just checked in. There it is. Alphabet. Google has changed its map. So when you look up the body of ocean that fills the inside curve from Florida to Mexico, it now says Gulf of America, the way President Trump wanted. Outside the US it still says Gulf of Mexico. It's the marketplace Morning report from APM American Public Media.

[Kai Ryssdal]

Hi, I'm Kai Ryssdal. The host of How We Survive. This season is all about the institution that shaped me, the US military and how it could shape the future of climate tech. You've probably heard that 2024 was the hottest year on record, that wildfires devastated Los Angeles, and that the US Withdrew from the Paris Agreement. And while all that might feel pretty terrible, the climate crisis is not an inevitable reality. From simulated climate emergencies to micro grids and sustainable aviation fuel, we look at how the military is investing part of its $850 billion budget in a greener, more resilient future. Listen to how we survive. Wherever you get your podcasts.