New tax cuts projections predict it won't pay for itself
House Speaker Paul Ryan (R-Wis.) left, and Senate Majority Leader Mitch McConnell, (R-Ky.), right, listen as President Donald Trump speaks. Photo: Evan Vucci / AP
Just days away from a crucial vote on the GOP's tax overhaul package, The Tax Foundation and Committee for a Responsible Federal Budget have released new analyses breaking down the estimated cost of the bill.
By the numbers: The conservative Tax Foundation predicts the plan will increase the federal deficit by $1.47 trillion, or $448 billion when you factor in economic growth; while the group of budget hawks say it could end up costing $2.2 trillion, or $1.5 trillion including economic growth.
The bottom line: The wide range shows how imprecise the estimates are, but neither group thinks the tax bill is going to pay for itself.
- "The plan would significantly lower marginal tax rates and the cost of capital, which would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, and an additional 339,000 full-time equivalent jobs."
- When fully implemented, the bill "would spur an additional $600 billion in federal revenues from economic growth."
- Over the next decade, the cuts "would increase GDP by 2.86 percent over the current baseline forecasts."
- "Overall, the plan would decrease federal revenues by $1.47 trillion on a static basis and by $448 billion on a dynamic basis."
Committee for a Responsible Federal Budget analysis:
- The final plan would "would cost $1.46 trillion under conventional scoring and over $1 trillion on a dynamic basis over ten years, leading debt to rise to between 95 percent and 98 percent" of GDP by 2027 (compared to 91 percent under current law).
- When factoring in the series of expirations and long-delayed tax hikes incorporated in the bill, the package could end up costing $2.0 trillion to $2.2 trillion, meaning debt would rise to between 98 percent and 100 percent of GDP by 2027.