Tax Bill: Huge Increase in Debt, Eventual Tax Increase for Half of Americans

Jeff Stein at WP:

An overwhelming majority of academic economists say in a new survey that the Republican tax proposals would cause America's debt to grow by one critical measure.

Thirty-seven of 38 experts surveyed by the University of Chicago's Initiative on Global Markets agreed that the GOP tax bills in Congress would cause U.S. debt to increase "substantially" faster than the economy.

Only one economist — Stanford's Liran Einav — said that he was “uncertain” if the bills would exacerbate America's debt-to-GDP ratio. But after the survey's release, Einav said his response had been a mistake, and that he actually agrees with the economists who expect the debt ratio to soar. (Four other economists in the IGM panel didn't answer the question one way or the other.)

Tax Policy Center:

The Tax Cuts and Jobs Act is working its way through Congress. On November 9, the House Ways and Means Committee passed a version of the Tax Cuts and Jobs Act(link is external) and the entire US House of Representatives passed its version of the bill (link is external)on November 16. The Senate Finance Committee also passed its version of the Tax Cuts and Jobs Act(link is external) on November 16.

The Tax Policy Center has released distributional estimates of the Tax Cuts and Jobs Act to reflect the bill as passed by the Senate Finance Committee on November 16, 2017. We find the bill would reduce taxes on average for all income groups in both 2019 and 2025. In general, higher income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution. On average in 2027, taxes would rise modestly for the lowest-income group,chang e little for middle-income groups, and decrease for higher-income groups. Compared to current law, 9 percent of taxpayers would pay more in 2019, 12 percent in 2025, and 50 percent in 2027.