Ms. MacGuineas’s group estimates that Mr. Trump’s plan could reduce federal tax revenue by $3 trillion to $7 trillion over a decade. The economy would need to grow at a rate of 4.5 percent — more than double its projected rate, an unlikely prospect — to make the plan self-financing.
While Mr. Trump and his team point to the growth linked to tax cuts passed by previous presidents, today’s economy is different from that of 1981 or 2001, when Presidents Ronald Reagan and George W. Bush cut tax rates.
The Congressional Budget Office projects that the federal debt will grow by $10 trillion over the next decade. By 2027, the deficit could reach $1.4 trillion, or 5 percent of the economy, it says.
The office’s predictions have been off before, and the impact of tax cuts on the economy is a matter of debate, as so many variables determine a country’s economic fortunes. But tax historians and veterans of previous tax fights are quick to point out that lower rates are not necessarily a panacea for slow growth.
“This is fool’s gold that you’ll cut taxes, everybody will work harder, more money will come and you’ll erase the fiscal impact,” said Steve Bell, who was a Republican staff director of the Senate Budget Committee from 1981 to 1986. “It never happens.”
Joseph J. Thorndike, director of the Tax History Project at Tax Analysts, said the Trump plan appeared to have strong parallels with Reagan’s 1981 cuts. Mr. Thorndike recalled that the Reagan administration soon realized the problem of the red ink it was facing and started looking for new sources of revenue.
“This looks like ’81, where they said, ‘Deficit be damned, we want to do a tax cut,’” Mr. Thorndike said. “It’s a cautionary tale.”
Twenty years later, the Bush tax cuts, which reduced the top individual tax rates and increased the standard deduction for low-income households, took place in a different environment. Mr. Bush made the case that it was time to spend the nation’s surplus to jump-start a flagging economy.
“It’s very important to recognize that the fiscal situation today is not what it was in 2001,” said Scott Greenberg of the Tax Foundation, a nonpartisan group. “Instead of facing a large projected surplus, the country faces a large projected deficit.”
The White House’s outline was too thin on details to allow for a concrete analysis of how much deficits would grow. There were no specifics about what income would fall into the three, instead of seven, individual tax brackets. The explanation of how the mammoth switch to a territorial corporate tax system would work was vague. There was no word on how low the tax on repatriated foreign corporate earnings would be. And Gary D. Cohn, the director of the president’s National Economic Council, could not say how much of a tax cut a middle-income American would get.
The debate over the impact of the plan is only beginning. If Republicans are not able to make the cuts revenue-neutral — that is, causing no increase in the deficit — they will need the support of Democrats to get 60 votes in the Senate and make the legislation permanent under budget reconciliation rules. Otherwise, any changes to the tax code will expire in 10 years.
While Republicans in the House, Senate and Trump administration have said they do not want to add to the deficit, there is a growing acknowledgment of the possibility that they will need to settle for temporary tax cuts. Treasury Secretary Steven Mnuchin said Wednesday that short-term cuts were better than nothing. And Senator Orrin G. Hatch of Utah, the influential Republican chairman of the Senate Finance Committee, said this week that he could live with cuts that added to the deficit if it meant getting the economy moving faster.
Republican budget hawks will need to decide whether they want to stick to the arguments of fiscal responsibility that they used to bludgeon Democrats during the Obama era. One of those hawks, Senator Patrick J. Toomey of Pennsylvania, said Wednesday, “Rather than conforming to arbitrary budget constraints, the president’s plan rightfully aims to jump-start investment, which will produce significantly more revenue for the Treasury over the long term than any revenue-neutral tax plan could generate.”
Mick Mulvaney, director of the Office of Management and Budget, who was a fierce critic of deficits when he was a member of Congress, offered a glimpse of the rationale his former colleagues might embrace. “As a conservative, that bothers me a little bit,” he said Tuesday on CNN of the possibility that Mr. Trump’s tax plan would increase the deficit. “But we also look at deficits through sort of a different lens.”
For Democrats, now out of power, the reversal is bitterly ironic, and several lawmakers assailed the president for, they said, preparing to cripple the country with debt.
“I’m not the first to observe that a Republican Congress only cares about the deficit when a Democrat is in the White House,” said Alan B. Krueger, the Princeton economist who was chairman of President Barack Obama’s Council of Economic Advisers. “It may be that Dick Cheney is right and that deficits don’t matter to the public, but they do matter to the economy.”
But for Republicans who have been craving big tax cuts for years, confidence was high that the worries about deficits were overwrought.
“This is a thing of beauty, a thing of wonder,” Grover Norquist, the president of Americans for Tax Reform, said of Mr. Trump’s one-page plan. “Growth, growth, growth!”