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Economy
Nonpartisan Analysis Confirms: GOP Tax Cuts Would Come Nowhere Close to Paying for Themselves
Economic activity spurred by the tax breaks—which are largely an extension of soon-to-expire provisions of the 2017 Trump-GOP tax cuts—would increase federal revenues by roughly $103 billion between 2025 and 2034, according to JCT.
That would barely put a dent in the overall projected cost of the tax cuts, bringing it down to $3.7 trillion from $3.8 trillion.
"I'm sorry, it is so funny that JCT says the GOP tax provisions pay for only 2.7% of themselves," Bobby Kogan, senior director of federal budget policy at the Center for American Progress, wrote in response to the analysis. "Republicans are out here pretending their tax bill will be the single greatest boost to the economy ever, and JCT says they only get a minuscule boost."
A separate analysis published Thursday by the Institute on Taxation and Economic Policy (ITEP) shows that the benefits of the Republican bill's tax provisions would flow disproportionately to the wealthiest Americans.
"The $121 billion in net tax cuts going to the richest 1% next year would exceed the amount going to the entire bottom 60% of taxpayers (about $90 billion)," said ITEP, whose analysis did not factor in the impact of the legislation's unparalleled cuts to Medicaid and federal nutrition assistance, which would deliver a major blow to the household resources of lower-income Americans.
Amy Hanauer, ITEP's executive director, said Thursday that "it's not surprising that this bill was written behind closed doors and rushed through in the night before Americans had a chance to see what it contains."
"This bill extends enormous tax cuts to those who have the most," said Hanauer. "It will increase inequality, reduce health coverage, and take food from people's tables, all to shower the wealthiest people in this country and foreign investors with tax breaks. In the end, this reconciliation bill redistributes resources up the income scale, widening the already-huge chasm between the rich and the rest of us."
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