WASHINGTON – The Treasury Department released a one-page analysis of the nearly 500-page Senate tax bill Monday that suggested the $1.5 trillion plan would more than pay for itself, assuming the economy grows much faster than any independent analysis of the bill has projected.
The Treasury acknowledged that its analysis was based on optimistic economic forecasts that assumed a host of policy changes yet to be enacted, including increased infrastructure spending, further loosening of business regulations and changes to welfare programs.
The analysis left many tax experts scratching their heads and prompted criticism that the Treasury was offering misleading data.
“The report does not appear to be a projection of the economic effects of a tax bill,” said Scott Greenberg, a tax analyst at the conservative Tax Foundation. “It appears on the other hand to be a thought experiment on how federal revenues would vary under different economic effects of overall government policies. Which is, needless to say, an odd way to analyze a tax bill.”
The Treasury has come under criticism for not producing a full assessment of the $1.5 trillion tax plan moving swiftly through Congress. Treasury Secretary Steven Mnuchin has repeatedly insisted that his department would provide details to back up the claims that he and other Republicans have made that the tax cuts will generate enough economic growth to avoid adding to the national debt.
Yet Treasury’s analysis does not show the type of revenue-neutral tax cuts Mnuchin and Republican leaders have suggested. Instead, it looks far beyond the tax legislation and assumes more robust economic growth than many economists consider likely.
“I don’t believe in magic,” said David Brockway, staff director of the Joint Committee on Taxation during the Reagan administration. “It’s just a political statement.”
Democrats on Monday called the Treasury Department’s analysis “fake math.”
“It’s clear the White House and Republicans are grasping at straws to prove the unprovable and garner votes for a bill that nearly every single independent analysis has concluded will blow up the deficit and generate almost no additional economic activity to make up for it,” said Sen. Chuck Schumer of New York, the Democratic leader.