Top tax economist says the GOP bill is 'crazy and stupid'

  • Martin Sullivan, an economist and longtime federal tax analyst, told Business Insider the GOP tax bill is "crazy" and "stupid."
  • Sullivan said the rushed process Republicans are using to try to pass the bill wasteful and could hurt the legislation in the long-run.
  • He said that the bill is unlikely to produce substantial economic gains.


Marty Sullivan, the chief economist at tax researcher Tax Analysts, says he is normally reserved about policy. But he is making an exception for the Tax Cuts and Jobs Act (TCJA), the Republican tax legislation currently on a warpath through the GOP-controlled Senate.

"I'm usually pretty calm about policy, I tend to try and avoid using words like 'crazy' or 'stupid,' because I'm a pretty even-keel guy, but those words apply here," Sullivan told Business Insider on Wednesday.

Donald Trump talks tax reform in Pennsylvania: 

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Sullivan, a former staff economist at both the US Treasury and Joint Committee on Taxation, has a reputation for his research on taxes. Kevin Hassett, head of President Donald Trump's Council of Economic Advisers, said in 2013 that Sullivan "goes wherever the facts and the economics lead him."

In a column on Monday, Sullivan said the bill was being passed using "Waste, Fraud, and Abuse," decrying everything from the process being used to pass the bill to the details of the bill itself.

He pointed to the fact that Republicans have asked the Joint Committee on Taxation, the official congressional scorekeeper for Congress, to analyze tax legislation using dynamic scoring for years. This would allow the JCT to factor in economic growth projections when analyzing the deficit impact of the bill.

Crowds at the Anti-Trump Tax March:

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People march demanding President Donald Trump release his tax returns, in New York, U.S., April 15, 2017. REUTERS/Lucas Jackson
People march demanding President Donald Trump release his tax returns, in New York, U.S., REUTERS/Lucas Jackson
People march demanding President Donald Trump release his tax returns, in New York, U.S., REUTERS/Lucas Jackson
NEW YORK, NY - APRIL 15: Activists take part in a Tax Day protest on April 15, 2017 in New York City. Thousands of activists march to Trump Tower to demand that President Donald Trump release his tax returns. Photo by VIEWpress/Eduardo MunozAlvarez
NEW YORK, NY - APRIL 15: Activists take part in a Tax Day protest on April 15, 2017 in New York City. Thousands of activists march to Trump Tower to demand that President Donald Trump release his tax returns. Photo by VIEWpress/Eduardo MunozAlvarez
NEW YORK, NY - APRIL 15: People take part in a Tax Day protest on April 15, 2017 in New York City. Thousands of activists march to Trump Tower to demand that President Donald Trump release his tax returns. Photo by VIEWpress/Eduardo MunozAlvarez
MIDTOWN MANHATTAN, NEW YORK, UNITED STATES - 2017/04/15: Demonstrators in New York City rallied at Bryant Park in Midtown Manhattan before march to Trump Tower as part of a nationwide series of demonstrations to demand the release of President Donald J. Trump's past income tax returns. The march coincides with the deadline for filing 2016 income tax returns in the United States. (Photo by Albin Lohr-Jones/Pacific Press/LightRocket via Getty Images)
NEW YORK, NY - APRIL 15: Activists take part in a Tax Day protest on April 15, 2017 in New York City. Thousands of activists march to Trump Tower to demand that President Donald Trump release his tax returns. Photo by VIEWpress/Eduardo MunozAlvarez
MIDTOWN MANHATTAN, NEW YORK, UNITED STATES - 2017/04/15: Demonstrators in New York City rallied at Bryant Park in Midtown Manhattan before march to Trump Tower as part of a nationwide series of demonstrations to demand the release of President Donald J. Trump's past income tax returns. The march coincides with the deadline for filing 2016 income tax returns in the United States. (Photo by Albin Lohr-Jones/Pacific Press/LightRocket via Getty Images)
Demonstrators hold signs and march towards City Hall during the Tax March Los Angeles in Los Angeles, California, U.S., on Saturday, April 15, 2017. The Tax March is an organized nation wide protest, held on the traditional deadline date to file taxes, that seeks to promote transparency by calling on U.S. President Donald Trump to release his personal tax returns. Photographer: Troy Harvey/Bloomberg via Getty Images
Demonstrators hold signs and march towards City Hall during the Tax March Los Angeles in Los Angeles, California, U.S., on Saturday, April 15, 2017. The Tax March is an organized nation wide protest, held on the traditional deadline date to file taxes, that seeks to promote transparency by calling on U.S. President Donald Trump to release his personal tax returns. Photographer: Troy Harvey/Bloomberg via Getty Images
CHICAGO, UNITED STATES - APRIL 15: Demonstrators participate in a march and rally to demand President Donald Trump release his tax returns in Chicago, Illinois, United States on April 15, 2017. 15 April is the traditional day that US federal income taxes are due unless the date falls on a weekend. Similar protests were planned in cities across the country. (Photo by Bilgin Sasmaz/Anadolu Agency/Getty Images)
CHICAGO, UNITED STATES - APRIL 15: Demonstrators participate in a march and rally to demand President Donald Trump release his tax returns in Chicago, Illinois, United States on April 15, 2017. 15 April is the traditional day that US federal income taxes are due unless the date falls on a weekend. Similar protests were planned in cities across the country. (Photo by Bilgin Sasmaz/Anadolu Agency/Getty Images)
CHICAGO, UNITED STATES - APRIL 15: Demonstrators participate in a march and rally to demand President Donald Trump release his tax returns in Chicago, Illinois, United States on April 15, 2017. 15 April is the traditional day that US federal income taxes are due unless the date falls on a weekend. Similar protests were planned in cities across the country. (Photo by Bilgin Sasmaz/Anadolu Agency/Getty Images)
CHICAGO, UNITED STATES - APRIL 15: Demonstrators participate in a march and rally to demand President Donald Trump release his tax returns in Chicago, Illinois, United States on April 15, 2017. 15 April is the traditional day that US federal income taxes are due unless the date falls on a weekend. Similar protests were planned in cities across the country. (Photo by Bilgin Sasmaz/Anadolu Agency/Getty Images)
NEW YORK, NY - APRIL 15: People participate in a Tax Day protest on April 15, 2017 in New York City. Activists in cities across the nation are marching today to call on President Donald Trump to release his tax returns. (Photo by Stephanie Keith/Getty Images)
Protestors take part in the 'Tax March' to call on US President Donald Trump to release his tax records on April 15, 2017 in Washington, DC. / AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
Protestors take part in the 'Tax March' to call on US President Donald Trump to release his tax records on April 15, 2017 in New York. / AFP PHOTO / KENA BETANCUR (Photo credit should read KENA BETANCUR/AFP/Getty Images)
NEW YORK, NY - APRIL 15: People participate in a Tax Day protest on April 15, 2017 in New York City. Activists in cities across the nation are marching today to call on President Donald Trump to release his tax returns. (Photo by Stephanie Keith/Getty Images)
WASHINGTON, DC - APRIL 15: Tax Day demonstrators march to the Lincoln Memorial April 15, 2017 in Washington, DC. Activists gathered in cities nationwide to demand President Donald Trump release his tax returns. (Photo by Aaron P. Bernstein/Getty Images)
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But Republicans are aiming to vote on the TCJA in the Senate within days of the JCT's dynamic score, which is expected as soon as Wednesday. Sullivan said that constitutes a "waste of millions of dollar and thousands of hours by the JCT staff."

Sullivan said Republicans are likely rushing the process because the JCT score will only show small economic benefits from the tax bill. This would undercut one of the GOP's main arguments for the legislation.

"It's likely that when the JCT's estimates are released, it will show very little positive impact on economic growth form the bill," Sullivan said. "And I would agree with that."

In his column, Sullivan noted a few other reasons that the economic impact will be muted.

"Stimulus effects are likely to be minimal because the economy is already near full employment and the tax cuts are strongly tilted away from low-income households that would spend more than their well-off brethren," Sullivan wrote. "In addition, supply-side effects from lower marginal rates will be small because statutory rate cuts are small (or in some cases nonexistent)."

Sullivan said one of the largest reasons the economic effects will be muted is because Republicans are advancing the tax bill without any input from Democrats.

This phenomenon creates uncertainty, he said, because Democrats could try to change the bill if they regain control of any part of the government. The uncertainty, in turn, means that businesses are unlikely to invest in long-term projects that could boost the US economy.

"Any CEO that is planning on this being permanent and investing like it is has their head in the sand," Sullivan told Business Insider.

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