Brief Macroeconomic Analysis of the Tax Cuts and Jobs Act as Passed by the Senate Finance Committee
Benjamin R. Page, Joseph Rosenberg, James R. Nunns, Daniel Berger
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The Tax Policy Center has released an analysis of the macroeconomic effects of the Tax Cuts and Jobs Act as passed by the Senate Finance Committee on November 16, 2017. We find the legislation would boost US gross domestic product (GDP) 0.7 percent in 2018, have little effect on GDP in 2027, and boost GDP 0.1 percent in 2037. The resulting increase in taxable incomes would reduce the revenue loss arising from the legislation by $179 billion from 2018 to 2027. Because most of the tax cuts expire after 2025, we expect deficits (not including interest costs) would decline from 2028 to 2037 and macroeconomic feedback would boost the deficit savings by $34 billion over that interval. Including macroeconomic effects and interest costs, the legislation is projected to increase debt as a share of GDP by over 5 percent in 2027 and by over 4 percent in 2037.
Primary topic Campaigns, Proposals, and Reforms
Research Area Campaigns, Proposals, and Reforms