The estimated cost of the Republican tax plan would not be the “largest tax cut in history” as a percentage of gross domestic product or in inflation-adjusted dollars, as CNN’s Jake Tapper explains in our latest fact-checking collaboration. President Donald Trump and others in the administration have been making the “largest tax cut” claim for months.
The nonpartisan Joint Committee on Taxation estimated that the House version of the Tax Cuts and Jobs Act would cost $1.49 trillion over 10 years. Over the first four years, the average annual cost would be $185 billion. That’s about 0.9 percent or 1 percent of gross domestic product, depending on what that ends up being in 2018.
That would make it the eighth largest cut since 1918, according to the Committee for a Responsible Federal Budget’s analysis of Treasury Department data. The 1981 tax cut enacted at the beginning of the Reagan administration — which cost 2.9 percent of GDP over four years — is actually the largest, CRFB says.
Plus, in inflation-adjusted dollars, the House GOP plan is also less than the American Taxpayer Relief Act of 2012, which comes in at No. 1 with a $320.6 billion cost over a four-year average. It’s also less than tax reductions in 2010 ($210 billion) and 1981 ($208 billion).