GOP tax plan could cost $2.2 trillion: Study

GOP tax plan could cost $2.2 trillion: Study
© Greg Nash
The GOP’s outline for tax reform could cost the country $2.2 trillion in lost revenue over a decade, according to a preliminary study by the Committee for a Responsible Federal Budget , a fiscally conservative advocacy group.
 
“These numbers come with a high degree of uncertainty and exclude a number of potential offsets where no details exist. But it is clear that much more work needs to be done to ensure tax reform is fiscally responsible,” the group said in its study.
 
Senate Republicans are allowing themselves up to $1.5 trillion in deficit-financed tax cuts to pass tax reform. If the group’s estimates are correct, they will need to find billions more in revenues to pass the bill according to standards they set for themselves.
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The study found that tax cuts in the plan amounted to roughly $5.8 trillion over a decade. New revenues in the form of “base broadening” would bring the overall cost down to $2.2 trillion.
 
Other aspects of the plan could add even more to the cost.
 
“Given that it calls for only five years of expensing rather than permanent — a major budget gimmick — it also potentially sets the stage for an extenders package of over $1 trillion when expensing expires,” the study said.
 
Republicans say that increased economic growth and using a different baseline to measure the costs will help cover most, if not all of their deficit.
 
President Trump is expected to promote the Republicans' long-awaited tax-reform framework during a rally in Indiana on Wednesday. The framework was announced earlier in the day, and would cut the top tax rate for the wealthy, drastically slash taxes for businesses and eliminate most itemized deductions.