Jeb Bush’s tax plan would bring in $1.2 trillion less for the Treasury over 10 years, according to an estimate from four conservative economists.
Economists John Cogan, Martin Feldstein, Glenn Hubbard and Kevin Warsh estimate in a paper published by the Center for Global Enterprise that Bush’s proposal to lower tax rates and eliminate loopholes, as well as trim regulations, would boost growth and incomes, creating new tax revenues that would offset some of the government’s loss.
Without that economic feedback, the economists guess, Bush’s plan would cost the government $3.4 trillion over 10 years.
The projection, the first of its kind to assign a price tag to Bush’s tax plan revealed Wednesday, suggests that the Republican presidential candidate would have to make significant spending cuts to avoid boosting the deficit.
The four economists say Bush’s proposal “represents an essential reform to raise economic growth.” By increasing the rewards for working and investing, it would boost economic growth by enough to significantly offset the revenue that would be lost by the tax cuts on paper.
The assumptions used to gauge at the economic effects of Bush’s tax plan, they write, are “conservative.”
The four economists also calculate that Bush’s tax reform would raise the after-tax income of a typical family of four by $3,100 by 2020. That income was $69,000 in 2013, according to the Census Bureau’s American Community Survey.
All four economists are associated with past Republican officeholders or campaigns. Cogan, a Stanford professor, has been an adviser to Mitt Romney as a candidate and served in the Reagan administration. Feldstein, a Harvard professor, was a top adviser to Reagan. Hubbard, the dean of Columbia’s business school, was a campaign adviser to Romney and an official in the George W. Bush Treasury. Warsh, a former member of the Federal Reserve’s Board of Governors, worked in the Bush White House.
