You know what hasn't gotten enough attention in this election? How utterly ridiculous the Republican tax plans have become.
Marco Rubio, Ted Cruz, and Donald Trump are the top three contenders for the Republican nomination. Rubio has promised tax cuts amounting to $6.8 trillion, Cruz $8.6 trillion, and Trump a whopping $9.5 trillion, according to the Tax Policy Center (and that's not including interest on the debt they would rack up!).
To put that in perspective, the tax cuts George W. Bush proposed during the 2000 campaign were $1.32 trillion — which would be $1.82 trillion in today's dollars. And taxes were higher in 2000 than they are today, and the country was running surpluses rather than deficits.
It gets worse. Rubio and Cruz both support a Balanced Budget Amendment, so they can't just add their tax cuts to the national debt. They also support spending more on the military — up to $1 trillion for Rubio, about $2.4 trillion for Cruz. Trump supports more military spending and has also promised to avoid cuts to Social Security and Medicare.
All this talk of trillions of dollars can melt the brain. So let's get more specific. We worked with Marc Goldwein of the Center for a Responsible Federal Budget and reams of Congressional Budget Office numbers to come up with some illustrative examples of how much the Republicans would have to cut to pay for their tax plans.1 These aren't their only paths, of course — but for every FBI they want to save, they would need to cut other spending of equal value. As you'll see, it gets very hard, very fast.
How could Marco Rubio get to $6.8 trillion in tax cuts?
On day one of Marco Rubio's presidency, he announces that he'll pay for his tax cuts by doing something truly big: ending funding for Medicaid and for the Children’s Health Insurance Program — which 71 million Americans, or 22 percent of the country, rely on for health care. Impressive, right?
The problem is that only gets Rubio about $4.7 trillion.
To close the gap, Rubio could find another trillion dollars by eliminating all education spending — Pell grants, the Department of Education, K-12 funds, school nutrition programs, Head Start, all of it. That gets him to roughly $5.7 trillion.
Knocking out all justice spending could net another $561 billion. But there might be some political resistance to wiping out the FBI, the Drug Enforcement Administration, much of the Department of Justice, all United States attorneys, the entire federal judiciary, and the Federal Bureau of Prisons.
The good news is Rubio is pretty close now. All he needs is another $540 billion or so. And he could get that by wiping out international spending — so closing all US embassies and consulates around the world, zeroing all aid to developing nations, ending all military funding for allies, and closing the State Department, among other functions.
At this point, Rubio's there. Of course, he's also proposed increasing military spending by somewhere in the range of $1 trillion, so he somehow needs to pay for that, too. And then to fulfill his balanced budget promise, he's got to get rid of the deficits that already exist and are projected to grow in the coming years.
How can Ted Cruz get to $8.6 trillion in tax cuts?
Cruz doesn't go for any of Rubio's small-ball $6.8 trillion stuff. He's proposing a full $8.6 trillion in tax cuts.
To get there, he could start with everything on Rubio's list and then end all federal transportation funding. Goodbye, Coast Guard, Transportation Security Administration, Federal Aviation Administration, and Federal Highway Administration! And sorry, all you states relying on federal funds to build or rebuild your highways and ports!
The problem is all that money only amounts to $935 billion. That gets Cruz to a cool $7.8 trillion, but his job isn't done yet. The good news is that the $715 billion he could get from eliminating spending on veterans would pretty much close the gap. And who'll miss the Department of Veterans Affairs, the Veteran Benefits Administration, the Veterans Health Administration, or the National Cemetery Administration?
Of course, there is one small problem. In addition to his tax plan, Cruz has also promised to increase military spending by $2.4 trillion. And he's also got Rubio's balanced-budget problem.
Donald Trump's plan is "not in the universe of the realistic"
Some political commentators like to describe fanciful proposals they view as wildly unrealistic as "puppies and rainbows" plans. Here's the New York Times's Josh Barro doing so about Marco Rubio's position on tax cuts.
But if Rubio's tax plan is "puppies and rainbows," then Donald Trump's may be best described as "unicorns and time portals." It's so far beyond the plausible that science fiction, rather than children's literature, feels like the right genre for capturing its essence.
"It's not even in the universe of the realistic," said Goldwein.
Here are a few ways of thinking about just how massive Trump's proposed tax cuts are:
- The projected US deficit for the next 10 years is $9.4 trillion. Passing Donald Trump’s $9.5 trillion tax cuts would more than double that total.
- The federal government is expected to bring in about $21 trillion in individual income taxes over the next 10 years. Trump’s cuts amount to a 45 percent reduction from that projection.
- Trump's proposed tax cuts amount to about 80 percent of the total budget for Social Security, the federal government’s largest program.
- America's defense budget — which funds the Army, Navy, Air Force, etc. — costs a little more than $6 trillion. In other words, you could completely dissolve the entire American military and still only be two-thirds of the way to Donald Trump's proposed tax cut.
But it's not just that Trump wants the biggest tax cut of any of the three candidates. It's that he's also promised to maintain funding for entitlements while increasing spending on the military. There's just no way to reconcile all that. Taken together, even the most sympathetic reading of Trump's plan dissolves into incoherence.
This does help explain, though, why Trump is so intent on having Mexico pay for the border wall — under his administration, America almost certainly couldn't afford it.
We're using static estimates here. The Republican contenders would certainly prefer that we use "dynamic" estimates that suggest some percentage of these plans' costs would be offset by faster economic growth. The problem here is that careful research shows that that growth depends on things like, well, how you pay for these tax plans, and what the Federal Reserve does in response. It's entirely possible these plans could slow economic growth, because paying for them means cutting so deeply into infrastructure and education spending. So we're using static estimates, which is also traditionally what Congress has used.