Trump Budget Based on $2 Trillion Math Error

[unblock]

3. easy math shows it's ridiculous in practice for a tax cut to pay for itself:

basically, for a tax cut of 5% to pay for itself, the economy would have to grow by 5%.

a 5% tax cut is pretty small (not even 5 percentage points, but simply 5% -- e.g., the top tax rate going from 39.6% to 37.6% is a bit *more* that a 5% cut).

who on earth could seriously believe that cutting the top tax rate from 39.6% to 37.6% could make the economy grow by 5%, solely due to that tax cut???


the "laffer curve" argument has some minimal theoretical merit, but it works only at insanely high tax rates.
cut the tax rate from 99% to 98% and that's barely over a 1% tax cut. given that you're *doubling* take-home pay, it's quite possible that this increases the economy by more than 1%.

but in the range of realistic tax levels, the laffer curve is, well, just a laugh.