House Tax Cuts Don't Fully Pay for Themselves, Analysis FindsBy and
The House tax plan does not pay for itself through growth, and more income benefits flow to the top 1 percent than to other groups in its first year, according to the right-of-center Tax Foundation.
The bill would lower federal revenue by $1.98 trillion over 10 years -- before accounting for any economic growth it would produce, the group’s analysis says. But accounting for growth would trim that 10-year revenue loss to $989 billion, the study found.
Over the long run, the bill’s changes would lead to a 3.9 percent higher gross domestic product, would create 975,000 full-time equivalent jobs and would lead to wages that are 3.1 percent higher, according to the analysis.
The analysis found that in 2018, the top 1 percent of earners would see after tax gains of 7.5 percent, while the bottom 20 percent would see a 0.8 percent boost. In 2027, the bill would “lead to 0.9 percent higher after-tax income for all taxpayers” without counting growth effects, the policy group said, while income for the top 1 percent would see 3.3 percent more. When accounting for growth, after-tax incomes of all taxpayers would increase by 4.4 percent in the long run, according to the study.
The analysis differs from the roughly $1.41 trillion revenue loss found by the Joint Committee on Taxation, the official congressional scorekeeper, which didn’t factor macroeconomic assumptions into its analysis. The Tax Foundation attributed the discrepancy to differences between their models. The Republican budget allows for up to $1.5 trillion in new deficits over a decade.