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President Donald Trump is set to unveil a broad guide Wednesday to his approach to tax reform. More details will reportedly come in June, but Mr. Trump has hinted at one specific expectation.
“It will be bigger, I believe, than any tax cut ever,” the president told AP’s Julie Pace on Friday. “Maybe the biggest tax cut we’ve ever had.” This is the kind of rhetoric that ignites our happy research hearts at NewsHour. What would it take, we wondered, for Trump to pass the biggest tax cut ever?
READ MORE: Did President Trump deliver on his 100-day contract with voters?
First, let’s define terms. We are turning to a go-to metric: constant (inflation-adjusted) dollars per gross domestic product. This allows us to compare tax cuts in terms of what they meant to their times and economy. Next, we want to share our key source: This comparison chart from the U.S. Treasury.
We used them to find the biggest tax cuts (per GDP) since 1940:
During the 2016 campaign, the nonpartisan Tax Policy Center estimated Trump’s tax cut proposal would amount to 2.6 percent of GDP, putting him third on our list.
MORE: What have we learned from President Trump’s first 100 days?
So, with GDP next year forecast in the neighborhood of $20.1 trillion, Trump would need tax cuts worth $58 billion to achieve the largest tax cut ever (by this measure).
For perspective, Congress has had difficulty settling issues involving a few billion dollars. (Example: the coal miners’ fight that may risk a government shutdown. See our story, we think it’s worth watching.) But working in Trump’s advantage is that Republicans generally agree on a broad approach, collapsing rates and simplifying the tax code. But there are a lot of devils in the details of any tax cut, much less the “biggest ever.”
Lisa Desjardins is a correspondent for PBS NewsHour, where she covers news from the U.S. Capitol while also traveling across the country to report on how decisions in Washington affect people where they live and work.
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