politics

Senate Tax Plan Would Cost $516 Billion After Growth, Study Says

Gary Cohn, director of the U.S. National Economic Council, from right, Steven Mnuchin, U.S. Treasury secretary, Senator Orrin Hatch, a Republican from Utah and chairman of the Senate Finance Committee, and Senate Majority Leader Mitch McConnell, a Republican from Kentucky, wait to speak during a meeting with members of the committee on tax reform legislation at the U.S. Capitol in Washington, D.C., on Nov. 9, 2017.

Photographer: Andrew Harrer/Bloomberg

The Senate Republican tax proposal unveiled Thursday would cost $516 billion over a decade after assuming macroeconomic benefits as a result of the tax cuts, according to a new analysis Friday by the Tax Foundation, a right-of-center Washington think tank.

The group found that the bill would cost $1.78 trillion in revenue over a decade. That figure would be mitigated by $1.26 trillion in new revenue generated through economic growth. The Tax Foundation found that the plan would boost gross domestic product to 3.7 percent in the long term, raise wages by 2.9 percent and create about 925,000 full-time equivalent jobs.

It also found that the highest earners would benefit the most on a "static" basis -- by 2027, after-tax incomes would rise by 1.2 percent for all taxpayers, while the top 1 percent of earners would see a 4.5 percent gain. When including growth assumptions, the analysis found that after-tax income would rise by 4.4 percent for all taxpayers.

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