In short, Trump’s voodoo science economics simply doesn’t work and even conservatives think so.
Take, for instance, noted conservative think tank Tax Foundation that collects data and publishes research studies on tax policies at the federal and state levels. They have been scoring candidates’ tax proposals throughout the primary season and discovered that Trump’s tax plan would cost an “eye-popping $12 trillion over 10 years” as NBC News put it.
Not only does Trump’s plan run counter to his pledge not to increase the deficit, the gains from the tax cuts he proposes would disproportionately benefit the super-rich, like Trump himself, who stand to gain from several provisions of the plan. According to Tax Foundation, the top 1-percent would expect to see their after-tax incomes increased by 21.6 percent versus the 1.4 percent for the poorest 10 percent of the country.
As NBC News notes, “Trump’s plan would lower the top tax bracket for wealthier Americans to 25% from 39.5% today and the top corporate tax rate to 15% from 35% today,” adding that “Trump, like other Republican candidates, claimed that his plan would offset its cost by encouraging further growth.” However the Tax Foundation shot that claim down as they also scored the plan. The found through “using a model that assumes supply side conservative theories of economic growth are correct” that Trump’s plan would still “add $10.14 trillion to the deficit,” and that “his corporate tax cuts would add $1.54 trillion and his proposal to eliminate the estate tax would add another $238 billion.”
Key findings by Tax Foundation are as follows:
- Mr. Trump’s tax plan would substantially lower individual income taxes and the corporate income tax and eliminate a number of complex features in the current tax code.
- Mr. Trump’s plan would cut taxes by $11.98 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.
- The plan would also result in increased outlays due to higher interest on the debt, creating a ten-year deficit somewhat larger than the estimates above.
- According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to an 11 percent higher GDP over the long term provided that the tax cut could be appropriately financed.
- The plan would also lead to a 29 percent larger capital stock, 6.5 percent higher wages, and 5.3 million more full-time equivalent jobs.
- The plan would cut taxes and lead to higher after-tax incomes for taxpayers at all levels of income.
To put this in perspective, NBC News looked at Tax Foundation’s findings regarding other candidates, reporting that they “pegged the cost of former Florida Gov. Jeb Bush’s tax plan at $3.66 trillion, Sen. Marco Rubio’s at over $4 trillion and Sen. Rand Paul’s flat tax proposal at roughly $3 trillion.”
As NBC News concludes: Jeb Bush took a shot at Trump on Twitter – not only for the proposal’s cost, but also for using a similar structure to the one employed by Bush’s tax proposal.
“Finally saw Donald’s ‘tax plan,'” Bush wrote, adding: “Looks familiar! I’m flattered. But he should’ve stuck with growth & fiscal responsibility.”