President Donald Trump says businesses and individuals will receive a "massive tax cut" under a tax "reform" package he plans to unveil next week, reports The Associated Press.
In an interview, Trump said the plan will result in tax cuts for both individuals and businesses. He would not provide details of the plan, saying only that the tax cuts will be "bigger I believe than any tax cut ever."
But here is the thing, Trump's advisors have said that any tax "reform" will be revenue neutral, that is, a tax cut in one place will be made up for with a tax increase in another.
It will be a shell game.
Ryan McMaken wrote in January:
Whenever politicians bring up the topic of "tax reform," what they usually want is a reshuffling of taxes so changes to the tax code will look like a tax cut — without reducing tax revenues or lessening the tax burden. In other words, policymakers usually want a tax reform that is "revenue-neutral," and this has been explicitly stated by lawmakers on both sides of the aisle for years now.If you want to be serious about cutting taxes you don't play the tax reform shell game.You simply lower rates from the current structure.
Last month, for example, Kevin Brady, the chairman of the House Ways and Means Committee stated through his office that he will propose a new tax plan to Donald Trump that will not cut tax revenues: "rather than reducing tax revenue and increasing the US fiscal deficit, will 'break even within the budget, knowing it's going to grow the economy.'"
The president says the package will be released on "Wednesday or shortly thereafter."
White House National Economic Council Director Gary Cohn suggested that the White House still hadn't decided on all the specific elements of its tax plan.
"We've got a lot of things on the table," Cohn said. "We're working with all of the different levers."
The Washington Post reports:
Treasury Secretary Steven Mnuchin said the economic growth that would result from the proposed tax cuts would be so extreme – close to $2 trillion over 10 years – that it would come close to recouping all of the lost revenue from the dramatic rate reductions. Some other new revenue would come from eliminating certain tax breaks, although he would not specify which ones.
“The plan will pay for itself with growth,” Mnuchin said at an event hosted by the Institute of International Finance.Which means part of the tax cuts will be justified as to revenue neutrality based on magical growth numbers that will supposedly result in more tax revenue. The revenue won't be there and will result in a greater budget deficit in addition to some sneaky new taxes.
Bottom line: "Businessman" Trump is not looking to cut government spending but rather move the points of taxation around and increase the budget deficit.