NCPA - National Center for Policy Analysis

The Intergenerational Effects of the Trump Tax Plan

December 16, 2016

Donald Trump's tax plan will create three million new jobs and 5 percent economic growth in the first year alone, according to an analysis using the NCPA-DCGE dynamic model. But the Trump plan also increases the federal deficit over time. How will these accumulated fiscal imbalances translate into debt burdens for taxpayers into the future?

NCPA scholars analyzed the impact of Trump's tax and spending plan on the future fiscal health of the United States using the Congressional Budget Office's (CBO) 2016 Long TermTerm Budget Outlook as the baseline for the period 2016 to 2046. The CBO baseline estimates assume average real gross domestic product growth of 2.1 percent annually over the 30-year period. The projected annual deficits were discounted at 3 percent to obtain a net present value (present value of revenues minus the present value of expenditures) for future debt incurred under the CBO baseline and the Trump tax plan as shown in Table I.

The anticipated revenue from Trump's tax plan according to Beacon Hill Institute's NCPA-DCGE model:

Continue reading


Browse more articles on Tax and Spending Issues