GOP tax proposals could add $9 trillion to nation’s deficits: Analysis
A menu of tax cut proposals made by President Trump and Republicans could add north of $9 trillion to the nation’s deficits over the next decade without offsets, a recent analysis from the Peter G. Peterson Foundation has found.
In the report updated this week, the nonpartisan budget watchdog said the batch of GOP-backed tax cut proposals seen in recent months would increase the nation’s deficits by $9.1 trillion over 10 years, if not offset with spending cuts or tax increases. The calculation also includes related interest costs, the group said.
More than half of the projected price tag, or about $5 trillion, would come from the cost of fully extending the tax cuts in Trump’s signature Tax Cuts and Jobs Act of 2017 – a key policy goal for many Republicans as they work to advance the president’s agenda this year.
Among the other proposals the group analyzed included pitches to restore the full state and local tax (SALT) deduction, nix taxes on tips and overtime wages, as well as lowering the corporate rate to 15 percent for domestic production – all proposals that, together, were projected to add more than $2 trillion to the nation’s deficits in a decade.
Another proposal aimed at ending taxation of Social Security benefits, which Trump proposed on the campaign trail last year, was estimated to have a $1.4 trillion price tag. The figure reflects a $1.19 trillion increase in primary deficits under the pitch, along with a $209 billion bump in interest costs.
The analysis comes as Republicans are working to pass a major tax package this year. While the party has slim control in the Senate, Republicans are hoping to use a complex procedural process known as budget reconciliation that would allow them to push through legislation enacting Trump’s tax priorities despite Democrat opposition.
While Republicans have discussed a list of changes to tax policy that could make the cut, changes to Social Security would not be permissible as part of the process. However, some Republicans have continued to push for separate legislation to do away with income taxes on Social Security benefits.
Top Republicans have also previously ruled out doing away with the SALT cap, although there has been some support in the party in recent months for raising the cap for relief for their constituents in states like New York.
Conservatives have been pressing for more than $1 trillion in spending reductions to ride alongside tax cuts in an eventual budget reconciliation package the party hopes to move out of Congress in the months ahead. Republicans have also pushed back on scoring of their proposed tax cuts, defending the measures as “pro-growth.”
However, figures from the Congressional Budget Office (CBO), Congress’ official budget scorekeeper, tell a different story.
Last month, the CBO estimated deficits would see a sharp rise in the coming years should Trump’s signature tax cuts be made permanent, with debt levels projected to climb to 214 percent of gross domestic product (GDP) in 2054.
The national debt currently stands at more than $36 trillion.