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Senate Tax Plan Would Leave Trillion-Dollar Hole In US Finances

by Mike Godfrey, Tax-News.com, Washington

01 December 2017


The Senate tax bill would add about USD1 trillion to the US deficit over the next 10 years, according to the Joint Committee on Taxation (JCT).

The analysis, released November 30, found that the proposed Tax Cuts and Jobs Act would increase the level of economic output by 0.8 percent per year over the 10-year window – substantially lower than the 3-5 percent growth rate estimated by the White House Council of Economic Advisors in October.

"That increase in income would increase revenues, relative to the conventional estimate of a loss of USD1.414 trillion, by USD458bn over that period," said the JCT. "This budget effect would be partially offset by an increase in interest payments on the federal debt of about USD50bn over the budget period."

In total, the bill would add just over USD1 trillion to the deficit in its current form, it therefore concluded.

The increase in economic output and revenues would fall in the second decade, said the report, as many of the provisions in the bill are set to expire within 10 years.

The findings run contrary to claims from leading Republicans that the tax plan will pay for itself or reduce the deficit over the long-term.

JCT is a non-partisan committee of the US Congress that advises the government on tax legislation.

TAGS: tax | interest | budget | legislation | United States | Tax

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