President Donald Trump on Wednesday played up what he called the “biggest tax cuts in history” and boasted about economic growth, in a speech full of exaggerations and falsehoods.
WASHINGTON — At a Wednesday afternoon rally in Missouri, President Donald Trump played up what he called the “biggest tax cuts in history” and boasted about economic growth “in a nonbraggadocious way.”
“In fact, they’re going to say Trump is the opposite of an exaggerator,” he said of his rosy projections, in a speech full of exaggerations and falsehoods. Here’s an assessment.
He is wrong that “for years, they haven’t been able to get tax cuts, many, many years since Reagan.”
President Ronald Reagan, who enacted a major tax cut in 1981 and lowered tax rates again in 1986, was hardly the last president to have done so. President Bill Clinton signed the Taxpayer Relief Act of 1997. President George W. Bush enacted two major tax cuts in 2001 and 2003. The stimulus passed under President Barack Obama included hundreds of billions of dollars in tax cuts, and Obama later extended the Bush tax cuts with the American Taxpayer Relief Act of 2012.
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He inaccurately suggested the plan wouldn’t help the wealthy.
Trump insisted that the tax bill is “not good for me” or the wealthy. Referring to Sen. Chuck Schumer, D-N.Y., the minority leader, the president said: “I keep hearing Schumer, ‘This is for the wealthy!’ If it is, my friends don’t know about it.”
That is not supported by most analyses of the tax plans being considered in Congress.
Under the Senate plan, every income level would receive a tax cut in 2019, but people earning $20,000 to $30,000 annually would face a tax increase the next year, according to the Joint Committee on Taxation. By 2027, most people making under $75,000 each year would see a tax increase, while those making more would continue to receive a tax cut.
Under the House plan, every income group would see tax cuts through 2027, but the richest one-fifth of Americans would receive 56 percent to almost 75 percent of the cuts, according to the Tax Policy Center.
Based on his 2005 tax return, Mr. Trump himself could save more than $1.1 billion under the White House tax framework, according to an analysis by The New York Times, and the same amount under the House plan, a tax expert at Marcum LLP told NBC.
He falsely called the current plan the “biggest tax cut in the history of our country, bigger than Reagan.”
Trump has repeated this claim at least a dozen times since October, but it has not been true of any of the tax plans released in Congress or outlined by his administration.
A 2013 Treasury Department report assessed the size of major tax bills either as a percentage of the economy, by the reduction in federal revenue or in inflation-adjusted dollars. The 1981 Reagan tax cut is the largest under the first two metrics. It was equivalent to 2.9 percent of gross domestic product and reduced federal revenue by 13.3 percent. The 2012 Obama tax cut amounted to the largest cut in inflation-adjusted dollars: $321 billion a year.
For Trump’s tax cut to exceed the Reagan cuts as a share of GDP, the Committee for a Responsible Federal Budget estimates it would need to cost roughly $6.8 trillion over 10 years. To have a larger effect on revenue, it would need to cost $5.7 trillion. No version of the current tax cut plan meets those benchmarks.
The budget blueprint that Republicans released in mid-October, the bill passed in the House in November and the bill being considered in the Senate all amount to a tax cut of about $1.5 trillion over 10 years. This would place as the 12th-largest as a share of the economy.
He falsely suggested that the stock market was previously flat.
Trump spoke of tepid growth before he took office. “In all fairness, the stock market was going this way,” he added, drawing a flat line with his hand. The stock market has hit record highs under Trump, but the uptick began after the financial crisis in 2008.
The link he drew between market performance and GDP growth also contradicts his own comments. On Wednesday, Trump said the economy was “doing terribly” at 1.2 percent GDP growth, which occurred in the first quarter of this year. But during that quarter, he jubilantly posted on Twitter about the stock market’s “longest winning streak in decades.”
He exaggerated when he said a 3.3 percent growth was the “largest increase in many years.”
The Commerce Department adjusted its estimate of GDP growth to 3.3 percent in the third quarter of 2017 from a previous estimate of 3 percent. This is the largest increase in about three years, according to data from the Bureau of Economic Analysis. The economy grew at 3.2 percent in the first quarter of 2015 and at 5.2 percent in the third quarter of 2014, and the increase was larger than 3.3 percent in five other quarters under Obama.