Trump's 'Four Pinocchio' Tax Claim




  • In Business
  • 2020-01-13 23:32:44Z
  • By The Fiscal Times
 

President Trump routinely lies or makes exaggerated, unsupported and misleading claims. The Washington Post's most recent tally of such statements topped more than 15,400 over Trump's first 1,055 days in office, with the rate of falsehoods accelerating rapidly. The Post's fact checker, Glenn Kessler, added one more to the list Monday, highlighting a recent Trump claim about his tax cuts that might have slipped under the radar amid growing questions about the administration's shifting rationales for killing Iranian general Qasem Soleimani.

The claim: In a radio interview with Rush Limbaugh last Monday, Trump said, "[W]e're actually taking in more revenue now than we did when we had the higher taxes because the economy's doing so well."

The fact check: Kessler awards this one Four Pinocchios, the rating designation reserved for the biggest whoppers. "The way the federal budget works is often a mystery to Americans. But it shouldn't be to the president of the United States," he writes.

The explanation: Yes, the government's nominal revenues have gone up, but they were projected to rise before the tax cuts. "Inflation and population growth over time raise the cost of programs, while even a slowly growing economy will result in more taxes being collected," Kessler explains. But revenue has fallen significantly from what was projected before the tax cuts went into effect, a key factor driving the deficit higher.

An analysis done for the Post by Richard Kogan, a former White House budget official who is now senior fellow at the left-leaning Center for Budget and Policy Priorities, finds that, after adjusting for population growth and inflation, revenues rose by an annual average of 3.5% over fiscal years 2009 through 2017. From fiscal 2017 through 2025, revenues are projected to rise by an average 1.4% a year. The economy, meanwhile, is expected to grow at roughly the same rate over time: 1.3% a year, after adjusting for population growth and inflation, compared to 1.4% annual growth from 2009 through 2017.

"Trump gets virtually everything wrong in his framing of this factoid: Revenue has not increased because of the tax cut or because of the economy," Kessler concludes. "If anything, revenue estimates have slightly declined for 2019 and 2020 since the passage of the tax cut. And revenue growth is sharply down in the period after the tax cut, compared with the period before it."

The bottom line: Kessler somewhat generously suggests that the president needs to brush up on budget policy. But given that Trump still falsely claims - as he did again in the Limbaugh interview - that his tax cut was the biggest in U.S. history, it's hard to imagine that some tax and budget tutorials would prevent the president from repeating assertions he thinks will benefit him politically.

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