After being hounded by Democrats, the Treasury Department on Monday finally released its analysis of the Republican tax plan — and finds that it doesn’t, as Treasury Secretary Steven Mnuchin has long contended, pay for itself.
It’s not a long document — one page in total. The Treasury’s Office of Tax Policy concluded the economic growth that is forecast to materialize from the Senate tax plan will generate approximately $1 trillion in extra revenue over a decade.
That’s a far more generous estimate than the $408 billion of extra revenue that Congress’s Joint Committee of Taxation calculated but not enough to offset the $1.5 trillion cost of the legislation.
Most of the extra revenue comes from the forecast impact of lowered corporate taxes on economic growth, as well as changes to pass-through taxation and individual tax reform, the Office of Tax Policy said in the memo.
These increased receipts, according to the 10-year analysis, are primarily collected in the last five years, as full expensing creates growth in the early years but results in a deferral of collection of taxes, the Office of Tax Policy said.
The Office of Tax Policy does say that the tax plan, along with other Trump administration priorities including regulatory reform, infrastructure development and welfare reform, would end up generating an extra $1.8 trillion in revenue over a decade.
The New York Times had previously reported, citing an Office of Tax Policy insider, that no such analysis existed. Sen. Elizabeth Warren, the Massachusetts Democrat, had challenged Mnuchin to publicly release the analysis. The Treasury Department’s inspector general started an investigation into whether Treasury had analyzed the tax plan.