We now know a bit more about President Donald Trump's massive tax cut, which he has called "the biggest in history."
We know it's intended to be a simplification that would cut corporate tax rates to 15% and eliminate deductions and things like the alternative minimum tax, which would be a big deal for Trump himself.
We know that, according to the Tax Policy Center, the corporate tax cut alone could cost the country $2 trillion over the next 10 years.
Most importantly, we know that if the plan has any hope of survival, its architects must engage in a massive generational theft, and they would use a classic budget trick to pull it off.
The trick is a method is called dynamic scoring, which in reality is just a fancy way of justifying massive increases in the national debt.
"As we said, we're working on a lot of details," Treasury Secretary Steve Mnuchin said during a press conference on Wednesday to unveil the plan. "This will pay for itself with growth and reduced deductions."
Dynamic scoring has to do with the "growth" part of Mnuchin's explanation. To make tax cuts that look as if they wouldn't put a massive hole in the budget, policy wonks estimate the future benefit of tax cuts to the economy after making a load of assumptions — including about what a future government might do in response to falling tax revenue.
Those imagined benefits are then added to future budget projections, and — BOOM — you've got a healthy-looking balance sheet for America.
Now, you might think that so-called fiscally conservative Republicans would be opposed to things like this and that Trump might face opposition from his party.
But he won't. That's because there is a way to make Washington's budgets sound more sensible than they are. That's where dynamic scoring, much beloved by deficit hawks like House Speaker Paul Ryan, comes in.
The Republican-controlled House adopted dynamic scoring last year, but it's still up for debate in the Senate, where opponents like Sen. Bernie Sanders of Vermont have been critical of the practice. They say it politicizes the budgeting process.
That's in part because there's no exact way to dynamically score anything. This is not a science. There's no set process, and there are no set rules on the assumptions made. For example, Mnuchin said during the press conference that his office was playing with a bunch of different models. (That's reassuring.)
Read more: Trump tax plan needs dynamic scoring to justify budget - Business Insider
We know it's intended to be a simplification that would cut corporate tax rates to 15% and eliminate deductions and things like the alternative minimum tax, which would be a big deal for Trump himself.
We know that, according to the Tax Policy Center, the corporate tax cut alone could cost the country $2 trillion over the next 10 years.
Most importantly, we know that if the plan has any hope of survival, its architects must engage in a massive generational theft, and they would use a classic budget trick to pull it off.
The trick is a method is called dynamic scoring, which in reality is just a fancy way of justifying massive increases in the national debt.
"As we said, we're working on a lot of details," Treasury Secretary Steve Mnuchin said during a press conference on Wednesday to unveil the plan. "This will pay for itself with growth and reduced deductions."
Dynamic scoring has to do with the "growth" part of Mnuchin's explanation. To make tax cuts that look as if they wouldn't put a massive hole in the budget, policy wonks estimate the future benefit of tax cuts to the economy after making a load of assumptions — including about what a future government might do in response to falling tax revenue.
Those imagined benefits are then added to future budget projections, and — BOOM — you've got a healthy-looking balance sheet for America.
Now, you might think that so-called fiscally conservative Republicans would be opposed to things like this and that Trump might face opposition from his party.
But he won't. That's because there is a way to make Washington's budgets sound more sensible than they are. That's where dynamic scoring, much beloved by deficit hawks like House Speaker Paul Ryan, comes in.
The Republican-controlled House adopted dynamic scoring last year, but it's still up for debate in the Senate, where opponents like Sen. Bernie Sanders of Vermont have been critical of the practice. They say it politicizes the budgeting process.
That's in part because there's no exact way to dynamically score anything. This is not a science. There's no set process, and there are no set rules on the assumptions made. For example, Mnuchin said during the press conference that his office was playing with a bunch of different models. (That's reassuring.)
Read more: Trump tax plan needs dynamic scoring to justify budget - Business Insider
