GOP lawmakers struggle to close gaps in tax plan
Grover Norquist, president of Americans for Tax Reform, suggested eliminating the state and local tax deduction for corporations would be preferential to setting their tax rate above 20 percent.
The talks continued as the Treasury Department released a one-page analysis on Monday that said that the GOP tax plan would need an assist from other Trump administration priorities to pay for itself. That gave ammunition to critics who have pilloried administration claims that the tax cuts would generate enough economic growth on their own to cover the cost.
Welfare reform, infrastructure spending and regulatory relief would also help grow the economy and produce an extra $1.8 trillion of revenue over the next decade, Treasury said — more than enough to offset the up to $1.5 trillion worth of tax cuts that Republicans are working to get into law. However, welfare changes and an infrastructure plan are still just in the talking stages.
Treasury Secretary Steven Mnuchin has been saying for months that his department would produce an analysis that proved the tax cuts would be fully paid for, and other top Republicans like Senate Majority Leader Mitch McConnell have insisted they have no doubt that would be the case.
“The Administration has been focused on tax reform and broader economic policies to stimulate growth, which will generate significant long-term revenue for the government,” Mnuchin said in a statement.
But Monday’s release drew quick criticism, from both Democrats who labeled the analysis “fake math” and independent budget analysts who have long been skeptical that the tax plan would be able to pay for itself.
The Joint Committee on Taxation, in a report released Monday, found that the House tax plan would cost around $1 trillion over a decade even when accounting for economic growth, much the same as it found when examining the tax bill passed by the Senate Finance Committee.
A range of nonpartisan outside analysts — the Urban-Brookings Tax Policy Center, the Tax Foundation and the Penn Wharton Budget Model — have all reached similar conclusions.
“This Treasury report makes a mockery of dynamic scoring and analysis, which is meant to help policymakers understand how their choices will affect the size of the economy,” said Maya MacGuineas of the Committee for a Responsible Federal Budget.
Sen. Elizabeth Warren (D-Mass.), who asked the Treasury inspector general to investigate Mnuchin’s previous refusal to release the department’s economic analysis of the GOP tax plan, called Monday’s one-page analysis “pathetic.”
The Treasury Department “promised an economic analysis — but this isn’t it,” Warren said on Twitter. “I look forward to the IG’s investigation providing real answers for American families.”
Colin Wilhelm contributed to this report.