The House version of the Republican tax bill would accelerate economic growth, but not enough to offset the bill’s tax cuts, Congress’ official scorekeeper said Monday.
The Joint Committee on Taxation reported that the Tax Cuts and Jobs Act, which passed the House in mid-November, would increase deficits by just over $1 trillion over the next decade.
That number reflects the finding that the bill would be a $1.44 trillion tax cut before taking its effects on the economy into consideration. According to the group, the tax changes would increase the size of the economy by 0.7 percent on average over the next 10 years, enough to generate $430 billion in additional revenue. The result is a net reduction in revenue of a little more than $1 trillion.
The Joint Committee on Taxation had previously analyzed the Senate version and found a similar result: Even accounting for faster economic growth, the bill would lower revenue by more than $1 trillion.
Those findings mostly line up with assessments of the GOP legislation from outside groups such as the Tax Policy Center and the Tax Foundation, which have found that the tax cuts would accelerate commerce, but not enough to fully pay for themselves.
On Monday, the Trump Treasury Department released a one-page analysis stating that the tax cuts would bring in extra revenue if it is assumed that gross domestic product growth would pick up to nearly 3 percent. Unlike the Joint Committee on Taxation’s report, though, that finding wasn’t based on modeling of the tax plan, but rather simply on the assumption that growth would accelerate.
After taking control of both chambers of Congress in 2015, congressional Republicans pushed for the Joint Committee on Taxation to submit “dynamic scores” of major fiscal legislation, meaning analyses that take into account the possibility that changes in taxes could spur economic growth.
With Monday’s report, however, the dynamic scoring has indicated that their tax plans would fall short of the goal of paying for themselves by expanding the economy.
