WASHINGTON (dpa-AFX) - Reflecting expectations the House Republican tax reform bill would provide a relatively modest boost to economic growth, a new analysis by the Tax Policy Center found that the legislation would add about $1.3 trillion to the national debt over a decade.
The non-partisan Tax Policy Center found that the tax reform bill would increase GDP by 0.6 percent in 2018, with the boost tapering to just 0.2 percent by 2037.
The stronger economic growth would provide $169 billion in additional revenue over the next decade, well short of the estimated $1.436 trillion cost of the tax cuts.
The analysis subsequently found that the legislation passed by the House last week would increase the federal budget deficit by $1.266 trillion over the next ten years.
The Tax Policy Center argued the economic benefits of the bill would be modest because 'most tax reductions would accrue to high income households, who spend a smaller share of any increases in after tax income than lower income households.'
Other outside groups have also found that the House bill would lead to a spike in the deficit, although Republicans have argued the findings do not accurately predict the economic growth that will be spurred by the bill.
Republican leaders have pointed to a separate analysis by the Tax Foundation, which estimated the increased economic growth generated by the bill would increase tax revenues by $908 billion over the next decade.
'Depending upon the baseline used to score the plan, current policy or current law, the new revenues could bring the plan close to revenue neutral,' the Tax Foundation said in its analysis.
The competing analyses come as the Senate prepares to vote next week on their version of tax reform legislation, which includes significant differences from the House bill.
A Tax Policy Center analysis of the bill passed by the Senate Finance Committee last week found that the legislation would reduce taxes on average for all income groups in both 2019 and 2025.
Higher income households generally receive larger average tax cuts as a percentage of after-tax income, the Tax Policy Center said.
Meanwhile, the analysis found that 50 percent of taxpayers would pay more in 2027 due to the expiration of personal tax cuts as part of an effort to curb the deficits created by the bill.
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., called it outrageous that over 87 million middle class Americans would ultimately see a tax hike under the GOP plan.
'As corporations and political donors enjoy permanent tax cuts, the rest of the country will be forced to walk a financial tightrope while America's debt skyrockets and economic growth rises as fast as a snail climbing uphill,' Wyden said.
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