Republican presidential front-runner Donald Trump’s tax plan would cost an eye-popping $12 trillion over 10 years, according a new estimate that runs directly counter to the billionaire’s pledge not to increase the deficit with the proposal.
The conservative Tax Foundation, which has been scoring candidates' tax proposals throughout the race, found that Trump’s changes to the individual tax code would add $10.2 trillion to the deficit using traditional scoring methods, his corporate tax cuts would add $1.54 trillion and his proposal to eliminate the estate tax would add another $238 billion.
In addition, the gains from the cuts would disproportionately benefit ultra-wealthy Americans like Trump, whose personal income, business earnings and inheritors all stand to gain from a number of its provisions. According to the analysis, the wealthiest 1% of Americans would see their after-tax incomes increase by 21.6% versus just 1.4% for the poorest 10%.
The findings strongly contradict Trump's campaign rhetoric, where he's repeatedly boasted about his willingness to raise taxes on well-off Americans like himself in order to help others. On Tuesday, Trump said his plan would "cost me a fortune" at his press conference unveiling it.
For perspective, the same group pegged the cost of former Florida Gov. Jeb Bush’s tax plan at $3.66 trillion, Sen. Marco Rubio’s at over $4 trillion and Sen. Rand Paul’s flat tax proposal at roughly $3 trillion.
The analysis acknowledged that details of Trump’s plan were still vague, requiring them to make some approximate guesses, but added that the overall size was largely driven by the deep cuts in rates. Trump’s plan would lower the top tax bracket for wealthier Americans to 25% from 39.5% today and the top corporate tax rate to 15% from 35% today, which it would partially offset with some changes to deductions. Trump has also claimed his plan would add some 31 million households to the substantial number of Americans who pay no money — or gain money through credits — in income tax, bringing the total to 75 million filers.
A white paper by Trump outlining his tax plan on Monday claimed that it “doesn't add to our debt and deficit, which are already too large," a claim that conservative and progressive economists alike cast doubt on.
Trump, like other Republican candidates, claimed that his plan would offset its cost by encouraging further growth. The Tax Foundation also scored it using a model that assumes supply side conservative theories of economic growth are correct and found it still would add $10.14 trillion to the deficit.
The Trump campaign pushed back against the findings on Tuesday, claiming the organization underestimated the amount of revenue Trump would raise to offset its cuts.
"They seem to largely ignore most of the plan’s pay-fors, but even accounting for that, their figures seem wildly off the mark," Trump spokeswoman Hope Hicks told MSNBC in an e-mail. "Especially compared to how they scored similar provisions for Jeb Bush’s plan."
Shortly after the estimate dropped, Bush jabbed Trump on Twitter for the proposal’s cost, but also for employing a similar structure to his own reform plan.
“Finally saw Donald's 'tax plan,’” Bush wrote. “Looks familiar! I'm flattered. But he should've stuck with growth & fiscal responsibility.”
Despite Trump's gigantic net tax cut, influential conservative leader Grover Norquist said on Tuesday that he took issue with Trump's plan because it requires hedge fund managers to pay slightly more in taxes by closing the carried interest loophole, a change he derided as "a shiny bauble conceived in left-wing academia."
This is a relatively minor feature of the plan, however. The Congressional Budget Office estimates ending the carried interest provision would raise just $17 billion over 10 years. As the Tax Foundation analysis indicates, this small change would be dwarfed by the trillions of dollars in cuts proposed by Trump, some of which — like a reduction in the top capital gains tax rate — would directly benefit wealthy investors.