“The burden of government is not measured by how much it taxes, but by how much it spends." As Milton Friedman wrote in Free to Choose (1980), this principle illustrates the foundational economic concept that public expenditure, whether financed by taxes or debt, diverts scarce resources from the private sector. Four decades later, President Donald Trump’s newly enacted “One Big Beautiful Bill" stands as a direct challenge to that maxim. The legislation is expansive in rhetoric and even more so in fiscal consequence. It combines permanent tax cuts with historic spending increases and deep cuts to welfare, all at an estimated cost of $3.3 trillion over the next decade.

At nearly 900 pages, the legislation is not only one of the most extensive tax-and-spend packages in recent American history, but it also represents a significant structural shift in federal fiscal architecture. The Congressional Budget Office (CBO) estimates that the bill will increase the federal budget deficit by 1.3 percentage points of GDP annually over the next ten years. If temporary provisions are extended, as political economy suggests they often are, the Penn Wharton Budget Model projects the total deficit impact could rise to $5.5 trillion by 2034, raising the debt-to-GDP ratio to 127 percent. This would exceed the peak debt level recorded in the aftermath of World War II.

The core of the bill centres on the permanent extension of the 2017 Tax Cuts and Jobs Act. While proponents argue this will preserve current tax rates for middle-income households, the distributional benefits remain highly skewed. According to estimates from the Tax Policy Centre, the top 0.1 percent of earners will experience an average annual after-tax gain of $290,000. By contrast, households earning below $18,000 per annum will see their after-tax income decline by approximately $165, once changes to Medicaid and food assistance are included.

The tax provisions are supplemented by a range of........

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