BURSTThe tax portion of Republicans' wide-ranging bill full of President Trump's domestic priorities would cost $3.7 trillion over the next decade, the Joint Committee on Taxation (JCT) found.
That fits within the parameters laid out in the budget blueprint Congress adopted earlier this year, which allowed the House Ways and Means Committee up to $4.5 trillion for changes that could increase the deficit.
Tables from the JCT, which is the official revenue scoring body of Congress, show that extensions of the 2017 tax cuts and other measures will add about $5 trillion to the deficit while cuts to renewable energy incentives and amped international tax enforcement will reduce the deficit by about $2 trillion.
The JCT score does not provide an estimate for the restriction of Medicaid coverage proposed by Ways and Means Republicans but says the estimate will be provided by the Congressional Budget Office (CBO).
The score released Tuesday ahead of a committee hearing is relative to the CBO’s January 2025 current law baseline, Thomas Bathold, JCT’s chief of staff, told The Hill.
The deficit addition is rubbing GOP budget hawks the wrong way, though some say they intend to be open-minded about it.
“I remain open-minded because progress has been made based on our forceful efforts to force change,” Rep. Chip Roy (R-Texas) said Monday in a social media post. “But we cannot continue down the path we’ve been going down – and we will need significant additional changes to garner my support.”
The core element of the GOP tax package is the extension of the individual rate reductions made in 2017, which put marginal tax rates at 10, 12, 22, 24, 32, 35, and 37 percent – most of which were brought down by a few percentage points.
Those rate continuations will reduce federal revenues by $2.2 trillion through 2034.
The extension of the increased standard deduction, which was $29,200 for married couples and $14,600 for individual filers in 2024, would add $1.3 trillion to the deficit. However, the Trump tax cuts also did away with personal exemptions, which more than offset the cost of a higher standard deduction and will contribute $1.8 trillion in federal revenues through 2034.
Another major line item in the JCT score is the increased alternative minimum tax exemption extension, which by itself would reduce revenues by $1.4 trillion – more than the increase in the standard deduction.
Extending and increasing the 2017 boost to the child tax credit (CTC) will cost the government nearly $800 billion while enhancing the deduction for passthrough businesses will cost about $700 billion.
Tax cuts proposed by President Trump while on the campaign trail are included in the Ways and Means text, though they are set to expire at the end of 2028.
Temporarily getting rid of taxes on tips will cost $40 billion; no taxes on overtime will cost $124 billion; an enhanced deduction for seniors will cost $71 billion; and no taxes on car loan interest will cost $57 billion.
On the federal savings side, changes to the earned income tax credit will add $15 billion to government coffers while increased international tax enforcement will add $116 billion.
There are numerous rescissions and modifications to clean energy credits in Democrats’ Inflation Reduction Act that will increase revenues, including $78 billion for terminating the clean vehicle credit, $104 billion for nixing the commercial clean vehicle credit, and $154 billion for canceling the clean electricity investment credit.