Alan D. Viard, a tax expert at the American Enterprise Institute, a conservative research organization in Washington, said he and other researchers had repeatedly found<br />that “deficit-financed tax cuts were usually harmful to growth.”<br />Cutting the tax on investment income, for example, delivers the most bang for the buck, Mr. Viard said,<br />but unless the lost revenue is made up through increases in other taxes or spending cuts, the deficit will balloon and economic growth will suffer.<br />The Trump administration on Tuesday released its 2018 budget, called “A New Foundation for American Greatness.”<br />The left-leaning Economic Policy Institute estimated that the budget cuts would decrease growth by more than 1 percent by 2020.<br />Congressional Budget Office<br />Five-year projections of average<br />If one assumption has undergirded Republican economic policy for decades —<br />and is the foundation of the Trump administration’s first budget proposal — it is that tax cuts will unleash fantastic growth.<br />The Trump administration promises to cut taxes, keep revenues steady and crank out average annual economic growth of 3 percent,<br />but neither the budget nor the tax reforms previously outlined in sketchy form provide enough detail to figure out if that will happen.<br />The Trump plan, he said, “could well end up hurting a lot of poor people without boosting growth.”<br />“If you tilt the tax cuts toward lower-income households, they will spend more of it,” Mr. Behravesh said.
