Trump Tax Plan: Plant Beans and Wait for the Beanstalk - By Eugene Robinson
Trump's plan is based on the idea that tax cuts stimulate the economy to grow, not a little but a lot -- almost like a magic beanstalk that rises into the clouds, where we find a goose that lays golden eggs, allowing us to live happily ever after. I agree with the economists who find this scenario unlikely.
"The plan will pay for itself with growth," Treasury Secretary Steven Mnuchin said. His rosy projection is that increased growth would produce $2 trillion in new revenue over 10 years. But the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, estimates the tax cuts would cost $6.2 trillion in revenue during that same period, leaving a $4 trillion gap. Even the conservative Tax Foundation, which has rarely seen a tax cut it didn't like, foresees a $2 trillion gap.
Surely, leaving more money in the hands of middle-class and working-class consumers does stimulate the economy, because the money is quickly spent. But that's not what Trump's plan does. Instead, it gives massive tax relief to -- I hope you're sitting down -- corporations and the rich.
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The plan would also allow many wealthy individuals who own businesses to pay income tax not at the 35 percent individual rate but at the new 15 percent corporate rate. As I read the proposal, this would surely apply to The Trump Organization and its proprietor. What a coincidence.
MORE:
http://www.realclearpolitics.com/articles/2017/04/28/trump_tax_plan_plant_beans_and_wait_for_the_beanstalk_133740.html
