The economic growth effects of extending the Trump tax cuts won’t be anywhere close to what’s needed to offset their federal revenue losses, a new analysis has found.
The report released Thursday by the non-partisan Committee for a Responsible Federal Budget looks at the dynamic projections from several Washington think tanks for extending the Trump cuts, as well as the Congressional Budget Office (CBO), the official legislative scorer.
It finds that the CBO dynamic score adds an additional 2 percent to the cuts’ revenue losses. The rosiest think tank projection, which is from the conservative Tax Foundation, finds a 16 percent revenue loss reduction when adjusting for economic growth effects.
The cuts "will not produce nearly enough economic growth to offset their revenue loss," the group concluded.
Trump’s 2017 tax cuts grew the economy in 2018 — which is the year they would have been most pronounced — by 0.2 percent, according to the Congressional Research Service, citing the CBO. Growth projections from Goldman Sachs and other financial firms ranged from 0.3 percent to 0.8 percent GDP growth.
In order to pay for themselves in 2018, the Trump tax cuts would need to have grown the economy by 6.7 percent.
— Tobias Burns
