Trump's tax plan is twice as costly as Reagan鈥檚
Donald Trump's proposed tax plan could add $11 trillion to federal debt over the next ten years with a revenue reduction that would be the largest in history.
Donald Trump's proposed tax plan could add $11 trillion to federal debt over the next ten years with a revenue reduction that would be the largest in history.
Donald Trump has聽proposed a series of tax cuts聽that would聽reduce federal revenue by $9.5 trillion聽over the next decade and add $11.2 trillion to the debt when interest costs are included. Trump's proposed revenue reduction would be the largest in history.
Trump's tax cut is bigger than those proposed by former Republican rivals聽Ted Cruz聽($8.6 trillion),聽Marco Rubio聽($6.8 trillion), and聽Jeb Bush聽($6.8 billion). In fact, he would cut revenues by 4.0 percent of gross domestic product (GDP), nearly twice the 2.1 percent of GDP revenue loss from聽Ronald Reagan's tax cuts(net of his 1982 and 1984 tax聽hikes聽in response to debt concerns). Trump's cuts would also dwarf John Kennedy's (1.6 percent of GDP) and George W. Bush's (1.4 percent of GDP).
Individual income tax cuts (mostly slashing the top tax rate and increasing the standard deduction) would account for nearly three-fourths of聽Trump's revenue loss. His corporate tax changes would reduce revenue nearly $2 trillion over the coming decade and eliminating the estate tax would cost the Treasury another $200 billion. Trump has proposed limiting the value of some itemized deductions and some business preferences, but this new revenue would not be nearly enough to offset the cost of his cuts.
This article first appeared at TaxVox.