This paper discusses President Trump’s tax proposals and the House Republicans’ Blueprint, and makes a number of suggestions that would allow President Trump to keep all of his tax policy campaign promises and some others.
One component of the plan includes: The Blueprint does this. Instead of using a current law baseline, it uses a “current policy baseline”, which would assume that Congress extents expiring provisions. This change saves $400 billion more over the 10-year budget window. Second, the Blueprint uses a baseline that assumes that all of the revenue-raising provisions of the Affordable Care Act (“ACA”) are repealed. This includes the individual mandate tax, the 3.8% Medicare tax, and the tax on highcost (“Cadillac”) employer-provided healthcare plans. This repeal of the ACA taxes would reduce revenue by approximately $1.1 trillion over 10 years so this change in the baseline allows the Blueprint to raise $1.1 trillion less to attain budget neutrality. Together these two changes would move the goal post by $1.5 trillion dollars. This allows a $1.5 trillion tax cut without increasing the deficit a penny, at least on paper
Source: How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit by David S. Miller :: SSRN