Republicans’ tax reform plan would reduce deficits by more than $1 trillion, Treasury Secretary Steven Mnuchin said Thursday.
Because the newly announced plan would create economic growth, it eventually would lower deficits even though trillions of dollars of taxes would be cut on paper, he said.
“We think this tax plan will cut down the deficits by a trillion dollars,” Mnuchin said in an interview on Fox Business. “That’s a large number.”
Mnuchin boasted that the tax plan would accelerate the rate of economic growth to above 3 percent. That rate is “a moderate aspiration, and we can do higher than that,” he said.
One outside group, the Committee for a Responsible Federal Budget, issued a very rough estimate Wednesday that the GOP’s tax reform framework would be a net tax cut of about $2.2 trillion. In that analysis, the plan includes $5.8 trillion of tax cuts and $3.6 trillion of tax increases in the form of eliminated deductions, credits and other loopholes.
Yet, Mnuchin suggested in his interview on “Mornings with Maria” that the growth spurred by the tax rate reductions would lead to new revenue, canceling out the revenue loss and actually aiding the government’s fiscal situation.
The plan has not received an analysis from Congress’ own tax modelers or outside groups. However, President Trump’s campaign plan was found to have increased deficits by trillions of dollars by groups that try to model the effects of tax reforms, allowing for new revenue generated by faster economic growth.
