3 ms·

Additionally, the CBO recently recalculated the long-term cost of the tax cuts to be $440 billion due to the changes in economic growth after the tax cuts came

Additionally, the CBO recently recalculated the long-term cost of the tax cuts to be $440 billion due to the changes in economic growth after the tax cuts came into effect. The NYT article is ignoring the more recent $440b April estimate in favor of citing the trillion dollar December estimate. https://www.cbo.gov/publication/53651 https://www.cbo.gov/publication/53651 https://www.investors.com/politics/editorials/trump-tax-cuts-revenues-deficits-paying-for-themselves/ https://www.investors.com/politics/editorials/trump-tax-cuts...

selectodude 8y ago
"For the 2018–2027 period, CBO now projects a cumulative deficit that is $1.6 trillion larger than the $10.1 trillion that the agency anticipated in June. Projected revenues are lower by $1.0 trillion, and projected outlays are higher by $0.5 trillion." "Laws enacted since June 2017—above all, the three mentioned above—are estimated to make deficits $2.7 trillion larger than previously projected between 2018 and 2027, an effect that results from reducing revenues by $1.7 trillion (or 4 percent) and increasing outlays by $1.0 trillion (or 2 percent). The reduction in projected revenues stems primarily from the lower individual income tax rates that the tax act has put in place for much of the period. Projected outlays are higher mostly because the other two pieces of legislation will increase discretionary spending. Those revenue reductions and spending increases would result in larger deficits and thus in higher interest costs than CBO previously projected." Thanks for the completely unsourced editorial from a really trash biased source, but it definitely requires that you don't read a single word from the CBO report.
ajross 8y ago
You're citing an IBD article (yeah, the one with "It's official!" in its title) which is inferring stuff from CBO, which doesn't claim that $440M at all in the link you posted. You get it by playing games with revenue and attributing every single dollar of the change to "the tax cut". That's not economics. Tax policy never is, but this is especially bad work.
allenz 8y ago
To arrive at $440 billion, IBD argues that the tax plan cut tax revenue by $1.69 trillion but caused GDP growth producing $1.1 trillion in new revenue. However, the $1.69 trillion figure already factored in GDP growth, so they double counted.[1] I'm surprised that they made such a basic mistake. You should read less IBD and more NYT. [1] CBO Appendix A, page 93: "Legislative changes... led CBO to increase its projection of the cumulative deficit over the 2018–2027 period by $2.7 trillion. Those changes were offset in part by the effects of revisions to CBO’s economic forecast, which led to $1.0 trillion in reductions to projected deficits, almost entirely because of increased projections of revenues."

selectodude 8y ago

"For the 2018–2027 period, CBO now projects a cumulative deficit that is $1.6 trillion larger than the $10.1 trillion that the agency anticipated in June. Projected revenues are lower by $1.0 trillion, and projected outlays are higher by $0.5 trillion." "Laws enacted since June 2017—above all, the three mentioned above—are estimated to make deficits $2.7 trillion larger than previously projected between 2018 and 2027, an effect that results from reducing revenues by $1.7 trillion (or 4 percent) and increasing outlays by $1.0 trillion (or 2 percent). The reduction in projected revenues stems primarily from the lower individual income tax rates that the tax act has put in place for much of the period. Projected outlays are higher mostly because the other two pieces of legislation will increase discretionary spending. Those revenue reductions and spending increases would result in larger deficits and thus in higher interest costs than CBO previously projected." Thanks for the completely unsourced editorial from a really trash biased source, but it definitely requires that you don't read a single word from the CBO report.

ajross 8y ago

You're citing an IBD article (yeah, the one with "It's official!" in its title) which is inferring stuff from CBO, which doesn't claim that $440M at all in the link you posted. You get it by playing games with revenue and attributing every single dollar of the change to "the tax cut". That's not economics. Tax policy never is, but this is especially bad work.

allenz 8y ago

To arrive at $440 billion, IBD argues that the tax plan cut tax revenue by $1.69 trillion but caused GDP growth producing $1.1 trillion in new revenue. However, the $1.69 trillion figure already factored in GDP growth, so they double counted.[1] I'm surprised that they made such a basic mistake. You should read less IBD and more NYT. [1] CBO Appendix A, page 93: "Legislative changes... led CBO to increase its projection of the cumulative deficit over the 2018–2027 period by $2.7 trillion. Those changes were offset in part by the effects of revisions to CBO’s economic forecast, which led to $1.0 trillion in reductions to projected deficits, almost entirely because of increased projections of revenues."