Trump: My tax plan would grow the economy. Tax Policy Center: No, it would shrink it by 4%.
by Dylan Matthews dylan@vox.com Oct 18, 2016, 2:40p
Donald Trump’s tax plan is a massive giveaway to the rich, costing $6.2 trillion over its first decade (before interest payments) and directing almost half of that to the top 1 percent.
But he and his surrogates have insisted it’s worth it — and might even pay for itself — by igniting supercharged economic growth. “The Trump economic plan creates at least 25 million jobs, boosts growth up to 4 percent, and is revenue neutral,” the campaign boasts on its website.
One problem: According to new analysis from the nonpartisan Tax Policy Center, the Trump plan wouldn’t increase growth. It would reduce it. Substantially. And it would do so precisely because it’s anything but revenue neutral.
TPC, using the economic projections of the Wharton Budget Model (PWBM) from the University of Pennsylvania, projects that the plan will help the economy in the short run by putting more money in people's pockets to spend. But by 2025, the impact of the plan becomes negative as an explosion in US government debt raises interest rates for businesses and consumers. After its first decade, the plan would reduce GDP by 0.5 percent. By 2036, two decades after enactment, it would cut GDP by 4 percent.
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http://www.vox.com/policy-and-politics/2016/10/18/13319138/trump-tax-policy-center-gdp
