The Republican plan sharply reduces individual and corporate tax rates.
The House Republican tax reform plan would add $1.7 trillion to the U.S. national debt over the next decade, according to a preliminary debt calculation by the Congressional Budget Office, exceeding the limits Republicans agreed to for their reconciliation bill.
While the CBO has yet to score the legislation, an estimate of the bill’s impact on debt projected the tax bill would decrease revenue by nearly $1.7 trillion over 10 years. To retain the special “reconciliation” status of their tax proposal in the Senate ― which would allow it to pass with only 51 votes instead of 60 ―- Republicans would have to bring the cost of the bill down to $1.5 trillion, though the House and Senate measures are expected to be different. Republicans control only 52 seats in the Senate.
The Senate budget chairman also has some discretion over what score the Senate uses to calculate the debt impact of its tax proposal, so Republicans don’t necessarily need to use the CBO (though other estimates appear in line with it).
The Joint Committee on Taxation, a congressional panel that examines tax legislation, has said the bill in its current form would reduce revenue by about $1.5 trillion over 10 years.
The Republican plan sharply reduces individual and corporate tax rates, offsetting some of the revenue loss by eliminating deductions and exemptions in a bid to simplify the tax code. Initial estimates suggest the wealthiest taxpayers would reap most of the benefits of the changes.