House GOP tax bill to add more than $1.3 trillion to deficit
The tax bill passed by House Republicans last week will add more than $1 trillion to the deficit even after boosting economic growth, according to an analysis released by the Tax Policy Center (TPC) on Monday.
The report finds the legislation making it’s way through the house would provide $169 billion in additional tax revenue for the federal government over the next decade, slightly cutting the total cost of the legislation from $1.436 trillion to $1.266 trillion. The House’s tax bill would reduce the number of individual tax rates, slash the corporate tax rate from 35 percent to 20 percent and eliminate many popular deductions,
However, congressional Republicans insist the plan will spur economic growth that will offset all of the planned tax cuts, which mostly favor corporations and high income earners. White House economic adviser Gary Cohn recently expressed his belief in the new Republican version of Reagan’s famous “trickle down” plan.
“We think we can drive a lot of business back to America, we can drive jobs back to America, we can make ourselves very competitive. We think we can pay for the entire tax cut through growth over the cycle. All of these things lead to higher GDP. We think this is very attainable. We have to give everyday hard-working Americans a tax cut. This has to be good for American workers, it has to be good for everyday American citizens. If we don’t do that, we haven’t accomplished anything.”
President Trump’s Treasury Secretary Steven Mnuchin has made similar statements while promoting the tax plan, arguing that the tax legislation would create more than a trillion dollars in addition savings through projected economic growth.
The TPC report estimates that 10 percent of taxpayers would pay higher taxes in 2019 under the proposed plan. But that number rises to 50 percent in 2027. It also shows that while all income groups would see tax cuts in the beginning, with those making between $300,000 and $750,000 receiving the largest tax cuts.