More than a year after the Tax Cuts and Jobs Act passed the U.S. House of Representatives, the nonpartisan Congressional Budget Office says it expects revenue to grow by $1.3 trillion, or about 3.5 percent, over the next 10 years.
That’s a far cry from the $1 billion in revenue the administration had projected at the time of the legislation’s enactment.
The CBO also projected that the bill would raise $2.2 trillion over the same period, or 7.3 percent.
The CBO said it expects a total tax cut of $1,000 per family by 2027.
The bill also reduces taxes for individuals earning more than $250,000, reduces deductions and other tax breaks for businesses and eliminates the estate tax, among other changes.
It also repeals some taxes on investments and eliminates tax penalties for non-cash interest.
Overall, the CBO said, the bill’s effects on the economy would be modest.
A total tax rate cut would reduce the number of people who pay federal income tax by about 25 million people over the coming decade, CBO said.
By 2027, that number would drop to about 9.7 million people, or 9.2 percent of the country.
CBO also projected the economic benefits of the tax cuts, including increased demand for consumer goods, job creation and reduced unemployment, would offset the cost to the federal government.
While the bill provides the White House with the first step to enact the cuts, it does not contain a path to full implementation.
The administration still needs to negotiate a final package that is acceptable to the congressional budget committees, and it must pass the House before the Senate can approve the measure.
“Given that there are still a number of unresolved issues, the Administration will continue to work closely with congressional committees to identify the most effective way to achieve the objectives of the law,” White House press secretary Sean Spicer said.
“The President remains committed to enacting this legislation and working to make it the most pro-growth tax reform legislation in the history of our country.”