A proposal from four prominent conservatives to cut taxes for businesses and provide funding for infrastructure could cost $5.5 trillion, according to the Committee for a Responsible Federal Budget (CRFB).
"Not paying for tax reform is extremely misguided, would explode the federal deficit, and end up harming long-term economic growth prospects," the CRFB, a nonpartisan budget watchdog, said in an analysis released Thursday.
Steve Forbes, Larry Kudlow, Arthur Laffer and Stephen Moore, who advised President Trump's campaign, argued in a New York Times op-ed on Wednesday that Trump shouldn't overhaul the whole tax code at once.
They said that Trump should instead start with a bill that cuts the tax rate for corporations and small businesses to 15 percent, allows businesses to immediately write off the cost of capital investments, taxes the repatriation of businesses' foreign earnings at a low rate and creates a fund for infrastructure.
The proposal, including interest, would increase the debt to 111 percent of gross domestic product (GDP) by 2027, compared to a debt level of 89 percent of GDP under the Congressional Budget Office's baseline, the CRFB said.
The debt-to-GDP level "would be higher than any time in U.S. history," the CRFB said.
Forbes, Kudlow, Laffer and Moore acknowledged in their op-ed that their proposal would increase the deficit in the short run. But they said that the tax cuts would lead to faster economic growth that would ultimately lower the deficit.
But the CRFB said that "there is no evidence that broad-based tax cuts can pay for themselves completely, and economic studies from across the spectrum have found that deficit-financed tax cuts only pay for a fraction of their cost."
The group added that "tax reform that slows economic growth by adding too much to debt can actually cost more once economic effects are incorporated."
The CRFB's estimates are based on estimates of similar policies that tax think tanks have produced. The group noted that the campaign advisers' op-ed lacked many details that could have a significant impact on the proposal's cost.
When asked about the $5.5 trillion cost estimate on Thursday, Laffer told The Hill that he didn't think the authors of the paper knew what they were talking about.
Laffer said that cutting the corporate tax rate to 15 percent would result in an increase in output, jobs and revenue.
“The one thing that does create revenues is economic growth,” he said.