- A new analysis from the Tax Policy Center shows small economic gains would result from the enactment of the Tax Cuts and Jobs Act.
- House Republicans passed the tax bill last Thursday, and the Senate is slated to vote on their companion bill next week.
The Republican tax bill recently passed by the House of Representatives would produce little growth if it becomes law, according to an analysis released by the Tax Policy Center on Monday.
One of Republicans’ major selling points on the bill, which allows for $US1.5 trillion in tax cuts, is that the cuts would pay for themselves in increased growth. According the TPC’s analysis, the growth that would result from the plan would not be enough.
The Tax Cuts and Jobs Act, which Republicans passed last Thursday, would increase US gross domestic product (GDP) over the next 20 years, the analysis found. The report estimates an immediate GDP increase of 0.6% in 2018, which would taper to 0.2% by 2037.
The analysis also claims the TCJA would rake in $US169 billion in revenue from that growth in the first decade and $US136 billion in the second, well short of the amount needed to pay for itself.
However, poor projected growth is unlikely to slow the tax process. Senate Republicans are slated to vote on their version of the bill next week when lawmakers return from the Thanksgiving break. The Senate plan is different from the House bill in many ways, including a repeal of the individual health insurance mandate.
While some GOP senators have balked at supporting the plan so far, poor economic scoring could complicate matters further. Sens. Bob Corker and Jeff Flake, both Republicans, have cited concerns about the tax bill’s potential additions to the federal deficit.
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