JCT: New tax law won’t pay for itself
Congress’s tax scorekeeper said Friday that the tax-cut package President Trump signed earlier in the day won’t fully pay for itself through economic growth.
After accounting for macroeconomic effects, the bill would reduce federal revenue by $1.07 trillion over 10 years, according to the Joint Committee on Taxation (JCT).
While that’s less than the $1.46 trillion price tag the JCT put on the bill before accounting for economic growth, the committee says the bill still isn’t close to being deficit-neutral.
The JCT’s report was released hours after Trump signed the tax package into law at the White House. The president said that the tax cuts will be “fantastic for the economy.”
The Treasury Department had said that an earlier version of the tax package, along with regulatory reform, infrastructure development and welfare reform, would produce enough economic growth to pay for the tax cuts. That analysis was widely criticized by tax experts as well as by Democratic lawmakers.
But congressional Republicans are optimistic that the tax cuts will pay for themselves, and they view the JCT’s estimates as conservative.
The right-leaning Tax Foundation estimated earlier this week that the law would cost $448 billion over 10 years after accounting for economic growth — a projected revenue loss significantly lower than the JCT’s but that still suggests the tax cuts won’t pay for themselves.