Tyler Cowen, Columnist

Today's Tax Cuts Are Tomorrow's Tax Increases

Before you get too excited about Trump's proposal, consider how the revenue will eventually be made up.

October 2, 2017 at 6:07 PM UTC

Tyler Cowen is a Bloomberg Opinion columnist, a professor of economics at George Mason University and host of the Marginal Revolution blog.

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For all the analyses of President Donald Trump’s tax plan, one big factor is missing for a final assessment. Once we’ve lost some revenue, which taxes will need to rise in the future? In other words, the plan is really a (less glorious) tax shift rather than a tax cut.

The Trump administration’s plan is short on specific numbers, which is not a surprise but also a sign that it will not be revenue neutral. Even more detail-oriented administrations tend to fudge their fiscal projections, so the Trump plan will probably increase the budget deficit significantly. By one estimate -- admittedly far from definitive -- the Trump plan will cut revenue by $4.2 trillion.