It still costs $1 trillion after accounting for economic growth.
The Senate tax bill would grow the economy by about 0.8 percent over 10 years, offsetting some of the bill’s cost but leaving the overall price tag at about $1 trillion, according to a new report by Congress’s Joint Committee on Taxation, the professional staff tasked with estimating the effects of tax changes.
The report flies in the face of confident assertions by Republicans in the Trump administration and in the Senate that their tax cut plan would pay for itself. “Not only will this tax plan pay for itself, but it will pay down debt,” Treasury Secretary Steve Mnuchin promised. “I think this tax bill is going to reduce the size of our deficits going forward,” Sen. Pat Toomey (R-PA) told reporters in early November.
JCT finds, by contrast, that growth would pay for about a third of the bill’s cost. On a “static” basis before considering growth, the bill costs $1.414 trillion over 10 years. The economic effects of the bill, JCT finds, would increase revenues by about $458 billion.
But this, in turn, is partially offset by the fact that the bill’s cost will lead to increased interest payments on the federal debt. Put it all together and you get a net cost of $1.0067 trillion. In no single year does growth pay for the cut.
What’s worse, JCT’s numbers suggest that Republicans’ decision to let major cuts for individuals expire at the end of 2025 dampens the growth effect of the law. Growth raises $56.1 billion in 2025, but only $38.8 billion the next year. Over the decades, the growth effects shrink dramatically and might even go negative: “Combined with Read More Here