Flawed Math: Plan Adds Effects of Growth, but Doesn’t Subtract Cost of Tax Cuts

In Budget, Economy On
- Updated

Lawrence H. Summers, the Harvard economist who served in senior roles in both the Clinton and Obama administrations, wrote in The Washington Post that it was “the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them.”

One example of the budget-ledger legerdemain: Mr. Trump has pledged to end estate taxation. His budget, however, projects that the government will collect more than $300 billion in estate taxes over the next decade. Indeed, the Trump administration projects higher estate tax revenue than the Obama administration did because it expects faster economic growth.

Mr. Trump, in other words, is proposing to balance the federal budget in part by simultaneously increasing estate taxation and eliminating estate taxation.

Peter R. Orszag, the director of the Office of Management and Budget during President Barack Obama’s first term, said the treatment of taxation was part of a broader failure by the Trump administration to present a credible plan for managing the budget.

“It is not hard to write down a series of number on a paper and say: ‘Tada! I balanced the budget!’” Mr. Orszag said. “That is a much different process than having a credible plan for how that could be achieved. And they have not done that.”

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