The Tax Policy Center, a nonpartisan research group, published a report this week showing that the $1.4 trillion tax bill passed by Congress is actually worth about $1,000 more in 2017 than the CBO estimated in July.
The $1 trillion tax cut passed by the House on Wednesday is not as big as the $3.6 trillion bill that was passed by President Donald Trump in May, according to the Tax Policy Institute.
The Tax Policy Council, a think tank, has estimated that the tax bill would raise revenue of about $8,000 per person, but that estimate includes $2,500 in revenue for each child in the U.S. The Tax Foundation, a conservative think tank that has been critical of the Republican tax cuts, has forecast that the House GOP bill will raise revenue by about $3,000 a person.
According to the Center for Budget and Policy Priorities, an economic policy group that tracks tax policy, the CBO estimate of $1 billion per person in revenue is a much smaller number than the $8.6 billion in revenue lost by the Senate Republican tax bill in its first year.
The CBO estimate is based on the same methodology used by the Tax Foundation to estimate the Senate bill’s impact.
“This is a pretty big number for the first year of the tax cuts,” said Chris Edwards, a senior fellow at the Center.
“We’ll have to see how it holds up.”
Edwards and the Tax Freedom Coalition, an advocacy group, argue that the Senate plan will be less effective in reducing the deficit.
“The bill will likely cost more than $3 trillion in revenue over a decade.
That means the Senate tax cuts will cost a lot more over time,” said Matthew Tester, a Tax Freedom coalition spokeswoman.
“It will also be more expensive to keep tax rates low than the Senate proposal.”
The Tax Foundation’s calculation of revenue loss is based upon CBO estimates that the GOP tax bill includes a $1 million tax cut for every dollar the economy adds to its gross domestic product, or GDP.
The group estimated that about one in four Americans would lose $1 to $2 a month in tax revenue from the bill.
The Congressional Budget Office, the nonpartisan agency that projects the economic impact of federal taxes, estimated the Senate measure would reduce GDP by 0.4 percent over 10 years.
The Senate bill also includes $3 billion in new revenue over 10 months to cover the costs of the bill’s tax cuts for the wealthiest Americans.
The Tax Freedom Group also argues that the legislation would result in an additional $2 trillion in tax cuts over the next 10 years, but not all of the $2.4 billion of that revenue will be lost in 2021 and 2022.
The nonpartisan Tax Policy Project estimates that over 10,000 tax breaks would remain in place under the House bill.
The CBO’s estimate of the Senate’s impact is based solely on the assumption that tax cuts that benefit households with high incomes would continue.
The GOP plan would lower tax rates for the top 2 percent of Americans by nearly $6,000 over 10 and 11 years.
It would also slash tax rates on corporations and pass-through businesses by $6.5 trillion over the same period.