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- A new analysis from the Tax Policy Center estimates that only small economic gains would result from the Tax Cuts and Jobs Act.
- House Republicans passed the tax bill last Thursday, and the Senate plans to vote on its companion bill next week.
The Republican tax bill recently passed by the House of Representatives would produce little economic growth if it were to become law, according to an analysis released by the nonpartisan Tax Policy Center on Monday.
One of Republicans’ major selling points on the bill, which allows for $1.5 trillion in tax cuts, is that the cuts would pay for themselves in increased growth. The TPC’s analysis concluded that growth resulting from the plan would not be enough.
The analysis did find that the Tax Cuts and Jobs Act, which Republicans passed last Thursday, would increase US gross domestic product over the next 20 years. The report estimates that the bill would directly boost GDP by 0.6% in 2018, an amount it said would taper to 0.2% by 2037.
The analysis predicted that the growth would create $169 billion in new tax revenue in the first decade after passing and $136 billion in the second, well short of the amount needed to pay for the legislation.
The poor growth projection comes as the GOP is moving its plan through Congress at a furious pace. Senate Republicans plan to vote on their version of the bill next week, when lawmakers return from the Thanksgiving break. The Senate plan is different from the House bill in many ways, including by having a repeal of the so-called individual mandate, which requires most Americans to have health insurance or pay a tax penalty.
While some GOP senators have balked at the plan, poor economic scoring could complicate matters further, with Sens. Bob Corker and Jeff Flake, both Republicans, having previously cited concerns about the tax bill’s potential additions to the federal deficit.