IMF Warns Trump Tax Bill Could Complicate U.S. Debt Reduction Efforts

The International Monetary Fund has raised concerns that proposed U.S. tax legislation could undermine medium-term fiscal stability. IMF spokeswoman Julie Kozack noted the bill appears counterproductive to debt reduction goals during a Washington briefing.

The Fund recommends gradual deficit reduction to achieve sustainable public finances, emphasizing the need to lower debt-to-GDP ratios. While 'medium term' remains flexible, the IMF typically references a five-year horizon—a timeframe where the Congressional Budget Office projects the bill WOULD add $3.3 trillion to deficits.

As lawmakers consider making 2017 tax cuts permanent, the IMF is preparing updated economic forecasts. Its forthcoming World Economic Outlook will assess the legislation's potential impact on both U.S. and global financial markets.