interest rates. The Joint Committee on Taxation and the Congressional Budget Office disagrees with the Tax Fountain, both agencies assume that tax cuts financed by deficits raise interest rates, crowding out private investment and hurting growth. For example, in June 2003, the CBO concluded from several models that the positive effects on growth of George W. Bush’s tax cuts would likely be largely offset by higher interest rates. Thus, Congress will almost certainly have to assume that Mr. Trump’s tax cut raises the deficit far more than what the Tax Foundation thinks. The plan assumes that Mr. Trump can boost GDP by $200 billion per year and tax revenue by $40 billion just by cutting the existing regulatory burden, which the National Association of Manufacturers says costs the U.S. economy $2 trillion per year, by 10%. However, this is flawed math. Suppose Mr. Trump repeals a rule that requires a power plant to spend $1 million on smokestack scrubbers and inspection staff. The company could apply the $1 million to profit and pay tax on it. But in the meantime, the supplier of the scrubber and the inspection workers lose $1 million in sales and
interest rates. The Joint Committee on Taxation and the Congressional Budget Office disagrees with the Tax Fountain, both agencies assume that tax cuts financed by deficits raise interest rates, crowding out private investment and hurting growth. For example, in June 2003, the CBO concluded from several models that the positive effects on growth of George W. Bush’s tax cuts would likely be largely offset by higher interest rates. Thus, Congress will almost certainly have to assume that Mr. Trump’s tax cut raises the deficit far more than what the Tax Foundation thinks. The plan assumes that Mr. Trump can boost GDP by $200 billion per year and tax revenue by $40 billion just by cutting the existing regulatory burden, which the National Association of Manufacturers says costs the U.S. economy $2 trillion per year, by 10%. However, this is flawed math. Suppose Mr. Trump repeals a rule that requires a power plant to spend $1 million on smokestack scrubbers and inspection staff. The company could apply the $1 million to profit and pay tax on it. But in the meantime, the supplier of the scrubber and the inspection workers lose $1 million in sales and