Judy Woodruff, PBS: “You are hanging a lot of this on these tax cuts, but we now have a number of experts who are watching those tax receipt numbers that come in regularly, and they are saying that they do not add up to what is anything like the kind of growth that the administration had projected off these tax cuts.”
National Economic Council Director Larry Kudlow: “Well, actually, overall revenues are up about 10 percent. So that’s a pretty good number. And let me say, one of the people that are skeptical of us, the Congressional Budget Office, nonetheless, their estimates before taxes and most recently after the taxes, they have argued, they have said, there’s roughly $7 trillion of higher nominal GDP, and from that comes about 1.2 trillion in extra revenues, so that the tax cuts are about 80 percent paid for overall.”
— Exchange on PBS’s “NewsHour,” March 11, 2019
“Even the CBO, with which we generally disagree — I’m not breaking news here on my part — but they just published their new numbers. You know, from the point of pre-tax-cut to now, we have had about $7 trillion unexpected increase, $7 trillion over 10 years in terms of GDP. And that kind of calculates to roughly 1.2, 1.3 trillion in additional revenue. That’s the CBO numbers. These are all 10-year estimates. I apologize for that, but that’s the convention. So, what am I saying here? The tax cut was about 1.5 trillion scored. We have virtually paid for it — I guess 80 percent paid for it — and that’s by the CBO’s own numbers.”
— Kudlow, in an interview on CNBC’s “Squawk on the Street,” March 8, 2019
President Trump’s chief economic adviser says new numbers from the Congressional Budget Office show that 80 percent of the administration’s tax cuts will be paid for in a decade. Even when accounting for lost revenue, the tax cuts will “virtually” pay for themselves because of increased economic activity, Kudlow suggests.
He’s not the first Republican to claim tax cuts pay for themselves. But he is the first to twist what the CBO’s nonpartisan number-crunchers said in a Feb. 28 analysis.
CBO Director Keith Hall factored in several big developments in this analysis. One was the estimated effect of the tax cuts Trump signed in December 2017. Another was “changes to federal spending resulting from legislation enacted early in 2018.” The biggest change came from “revised historical data and changes in the economic outlook … before accounting for the effects of the tax act.”
The Pinocchio Test
View the complete March 14 article by Salvador Rizzo on The Washington Post website here.