Resources for Tax Reform
Efforts to reform the tax code are underway, and the legislative process is in full swing. CRFB has been tracking and compiling the scores of each bill and the framework as they've been released. The table below shows the most up-to-date scores for the date of this publication.
|Scoring Organization||Conventional Score
Average GDP Growth
|Final Bill (Signed Into Law 12/22/2017)|
|Congressional Budget Office/Joint Committee on Taxation (dynamic score)+||$1,455||$1,070+||<0.02%|
|Conferenced Tax Bill (Passed by House and Senate)|
|Joint Committee on Taxation (dynamic score*)||$1,456||~$1,000*||<0.08%*|
|Tax Policy Center||$1,454||$1,268||~0.00%|
|Penn Wharton Budget Model||$1,968||$1,545 to $1,797†||0.06% to 0.12%|
|CRFB True Cost (without gimmicks)||$2,000 to $2,200||$1,600 to $1,700||<0.08%*|
|Senate Tax Bill (Passed by Senate 12/2/17)|
|Joint Committee on Taxation (dynamic score*)||$1,447||~$1,000*||<0.08%*|
|Tax Policy Center||$1,447||$1,260||0.004%|
|Penn Wharton Budget Model||$1,666||$1,225 to $1,447†||0.05% to 0.10%|
|CRFB True Cost (without gimmicks)||~$2,000||~$1,600||<0.08%*|
|House Tax Bill (Passed by House 11/16/17)|
|Joint Committee on Taxation (dynamic score)||$1,437||$1,008||~0.10%|
|Tax Policy Center||$1,437||$1,266||0.03%|
|Penn Wharton Budget Model||$1,840||$1,470 to $1,697||0.04% to 0.09%|
|CRFB True Cost (without gimmicks)||$1,948||n/a||n/a|
|Senate Tax Bill (Approved by committee 11/17/17)|
|Joint Committee on Taxation (dynamic score)||$1,414||$1,007||<0.08%|
|Tax Policy Center||$1,412||$1,233||0.002%|
|Penn Wharton Budget Model*||$1,641||$1,271 to $1,522||0.03% to 0.08%|
|CRFB True Cost (without gimmicks)||$1,949||n/a||n/a|
|Tax Foundation on Senate bill before markup||$1,775||$516^||0.36%^|
|Tax Policy Center on Unified Framework||$2,416||$2,364 to $2,471||-0.01% to 0.03%|
|Penn Wharton Budget Model on Unified Framework||$1,505 to $4,021||$1,017 to $3,492||0.14% to 0.16%|
|American Action Forum on plan based on Unified framework||$1,100||$411 to $439||0.22%^ to 0.25%^|
+Final reconciled bill scored by CBO to include oil and gas provisions; we have adjusted JCT's dynamic score to account for this. *denotes estimate is of a similar, though not identical, prior version. ^Estimate does not take into account the economic effect of higher debt. †These numbers includes outlay effects, which PWBM does not include in its dynamic revenue estimate.
CRFB has also published several resources on recent tax reform plans, policies that may be included, gimmicks lawmakers may use, the status of the current tax code, and other tax issues. Below are links to each of these publications, which will also be updated as new analyses are published.
Tax Cuts and Jobs Act
Tax writers in the House and Senate have each introduced their own version of the Tax Cuts and Jobs Act. Both bills propose major changes the to the tax code, but would add at least $1.5 trillion to our already unsustainable national debt.
- Sizing Up Revenue With the Tax Bill Enacted
- Official Analysis Finds Tax Bill Will Produce Marginal Growth, Cost $1.1 Trillion
- Final Tax Bill Could End Up Costing $2.2 Trillion
- JCT's Latest Analysis Confirms Tax Bills Will Produce Modest Growth, Won't Pay For Themselves
- Senate Tax Bill Could Ultimately Cost Up to $2 Trillion
- Comparing the Two Version of the Tax Cuts and Jobs Act Headed to Conference
- Official Dynamic Score Shows Senate Tax Bill Will Still Cost Over $1 Trillion
- Tax Policy Center Dynamically Scores House Tax Bill
- New Senate Tax Bill Cuts Less Than $3.7 Trillion of Tax Breaks
- Senate Tax Bill Could Add $1.8 Trillion to Debt
- The Good, the Bad, and the Ugly of the Senate Tax Bill
- Both House and Senate Tax Bills Carry Substantial Costs
- House Tax Plan May Add Over $2 Trillion to the Debt
- The Good, the Bad, and the Ugly of the House Tax Bill
- Tax Cut and Jobs Act Will Cost $1.5 Trillion
Recent Tax Reform Plans
There have been several tax reform plans released by various policymakers, including one by the Trump campaign, a broad framework released by the White House in April, and the House GOP "Better Way" plan released by House Speaker Paul Ryan last year.
- Big 6 Tax Framework Could Cost $2.2 Trillion (September estimate)
- How Much Will Trump's Tax Plan Cost? (April estimate)
- House GOP Sketches Out Details on Tax Reform
- How Much Does the House GOP Tax Plan Cost?
- Comparing the Trump Campaign and Better Way Tax Plans
- Analysis of the Tax Reform Act of 2014
Tax reform should be used to improve the nation's fiscal situation, not worsen it.
- Five Ways to Improve the Senate Tax Bill
- Options to Help Pay for the Big Six Tax Reform Framework
- Tax Reform Should Not Add to the Debt – Here's 5 Reasons Why
- Options to Help Pay For the Trump Tax Plan
- Principles for Responsible Tax Reform
- America Needs Tax Reform, Not More Debt
- The Feldstein-Feenberg-MacGuineas Cap Could Be Useful for Tax Reform
- Event Recap: Paying for Tax Reform
While well-designed reform can increase growth, tax cuts do not pay for themselves. Legislation should also be realistic and only use growth estimates from Congress's official scorekeepers – the Joint Committee on Taxation and Congressional Budget Office. Tax reform that dramatically increases deficits or includes retroactive or temporary tax changes are unlikely to have a large growth impact.
- Can Tax Reform Generate 0.4% Additional Growth?
- Tax Cuts Don't Pay For Themselves
- Dynamic Scoring Confirms: House or Senate Tax Bills Would Still Add to Debt
- What is a Reasonable Amount of Dynamic Revenue For Tax Reform?
- Under Dynamic Scoring, House Tax Bill Still Explodes the Debt
- How Fast Can America Grow?
- Policies to Grow the Economy
- How Camp's Discussion Draft Would Impact the Economy
The tax code has $1.6 trillion of annual tax expenditures, many of which could be eliminated or made more efficient in order to finance tax reform. Our below Tax Break-Down series describes many of these provisions, listing arguments for and against, and options for reform.
- Temporary Expensing is a Budget Gimmick and a Bad Idea
- The State and Local Tax Deduction Should Be on the Table
- The Mortgage Interest Deduction Should Be on the Table
- Health, Revenue, and Other Mandatory Savings Options
- Options for Reforming the Mortgage Interest Deduction
The Tax Break-Down
Our Tax Break-Down series takes a closer look at tax breaks one at a time, showing their cost, describing who benefits from them, providing arguments for and against keeping them, and offering options to repeal or reform them.
- The State and Local Tax Deduction
- LIFO Accounting
- Preferential Rates on Capital Gains
- Child Tax Credit
- Section 199, the Domestic Production Activities Deduction
- Municipal Bonds
- Cafeteria Plans and Flexible Spending Accounts
- Accelerated Depreciation
- Individual Retirement Accounts
- American Opportunity Tax Credit
- Intangible Drilling Costs
- Foreign Earned Income Exclusion
- FICA Tip Credit
- Low-Income Housing Tax Credit
- Charitable Deduction
Tax reform will likely be considered under reconciliation, a procedure that allows legislation to pass with a simple majority (50+1 votes) in the Senate rather than 60 votes. However, reconciliation also comes with other restrictions, such as not being able to increase the long-term deficit or make changes unrelated to the budget.
- Reconciliation 101
- The Tax Cuts and Jobs Act Doesn't Comply with the Byrd Rule
- Comparing the Reconciliation Instructions in the Congressional Budgets
- Debt Would Equal the Economy in 2028 with Senate Tax Cut
- How PAYGO Rules Could Affect Tax Reform
Tax reform should be fiscally responsible and avoid using gimmicks that can make it appear more responsible than it is.
- New Senate Tax Bill Hides Over $500 Billion of Gimmicks
- Five Gimmicks That May Hide the True Costs of Tax Reform
- Temporary Expensing is a Budget Gimmick and a Bad Idea
- Current Policy Gimmick Would Add Half-Trillion to Debt (Maya MacGuineas: GOP Considering a Half-Trillion-Dollar Tax-Reform Trick)
- Eight Gimmicks to Look Out For This Budget Season
- All the President's Budget Gimmicks
- The FY 2018 House Budget and Budget Gimmicks
- The FY 2018 Senate Budget and Budget Gimmicks
- Maya MacGuineas: Congress, Dump the Budget Gimmicks – We Need Real Reform
When considering a major overhaul of the tax code, it is important to keep several facts about the U.S. tax system in mind.
- Leon Panetta: Blowing Up the Debt is a Threat to America
- Leon Panetta and Other Former Defense Secretaries: Debt-Increasing Tax Bill Threatens National Security
- Checking the Facts on the Steve Forbes-Maya MacGuineas Tax Discussion
- Tax Day 2017: Charts to Explain Our Tax System
- Where Tax Dollars Went Last Year
- JCT Estimates Record $1.6 Trillion in Tax Breaks in 2017
Too often, politicians tell voters what they want to hear rather than what they need to know. The Fiscal FactCheck series evaluates claims made with fiscal implications to separate fiction from reality.
- Do Tax Cuts Pay For Themselves?
- Does the State and Local Tax Deduction Mostly Help High-Income Households?
- Do Retroactive Tax Cuts Do Much to Boost Economic Growth?
- Do Temporary Tax Cuts Only Have A Small Impact on Growth?
- Can Tax Reform Substantially Accelerate Economic Growth?
- Can We Dramatically Lower Tax Rates by Closing a Few Egregious Loopholes?
- Is President Trump's Tax Cut the Largest in History Yet?
- Is the U.S. the Highest Taxed Nation in the World?
Last Updated 1/5/2018