could people had time to think about it. people surveyed tend to always answer no in surveys. if you look at the hard evidence, imagine if they didn t respond to taxes, they would be doing their fiduciary duty to maximize profits for shareholders. it would be totally irrational to do that. the hard evidence is people do respond. one of the first papers i wrote out of grad school is where we looked at the 1986 tax act, the changes that it made to the tax code and how it affected investment there were large effects. gene sperling who was in your position before said the tax plan could $1.5 trillion and it s a deficit hole.
it s a deficit hole. this is in a tweet. just paraphrasing his tweet. he says basically doesn t justify that cost for 100 million households for tax increase. well, you know, i respect gene a great deal and consider him a friend and disagree with him. and i m sure at some point we ll have a chance to talk about that. but here s the way i think about it and what i would say to gene if he was here. if you look at the joint tax committee score in the tenth year they say the tax bill cost about $170 billion. in you look at gop it s about $28 trillion. so the amount of deficit you are talking relative in the tenth year is it only .6%. doesn t take a whole lot of economic growth to cover that hole by the tenth year. so the idea now we have the highest corporate tax on earth generating almost no revenue because they avoid it by moving it it ireland. if we fix that and make america
what s the rationale for having corporations have that certainty knowing they don t have to worry about what will happen while families have to worry about what politicians do six, seven years from now? sure. those are the things worked out by congress to create a bill that under senate and house rules can become law, and the non-negotiables for us are both met in both bills and we consider that good news. either that the choices that the senate has to make in order to acquire a resolution to make this law are choices that the senate has to make and we don t want to get in front of that process. the value one way or the other, whether corporate tax cuts i think tax cuts that are permanent, of course, have larger positive effects. last kevin, you ve melded politics and economics quite successfully. a political and economic question. you talk about growth covering what the congressional budget office and joint tax committee, say it could be a deficit hole,
without so many and the president touts this as the middle class miracle the details of how the middle class are going to benefit aren t there and his own economic adviser gary cohn talks about, well, we re betting on growth. you re making a massive hear the term dynamic scoring. on the face of it these are tax cuts that are going to cause a big deficit hole, probably 2 trillion or more. the degree to which the economy will grow because of this it s all going to be good. so we re going to have a giant real cut which we know is going to really kick up our deficit all based on the hope that the economy will grow. and it s not clear it will, it s also not clear we don t have recessions or oil prices fall. there s lots of things that effect economic growths. we re nine years out in this bull market. we do not wish that on anyone. the idea that it s like buying a new house on the hope that your income will go up in
very deep fiscal deficit hole that we re in. jonathan, the biggest deficit that this country has is a leadership deficit. washington is a lag indicator. it tends to act when there s a crisis that fors it to act without adequate due diligence, without appropriate forethought and then it wants to call it leadership. we need to recognize the reality. we need universal hearth in this country but it needs to be appropriate, sustainable and affordable. we have to move to evidence-based approaches both for payment systems and safe harbors in malpractice and we have to change our premium subsidies. people need more of a stake in health care and all of those things need to happen. so two things have to happen for us to make these tough choice. the president of the united states whoever it is, barack obama second term or mitt