Study From President's Alma Mater Says Tax Plan Will Explode Deficit

The Republican tax plan would increase the deficit by at least $1 trillion over the course of 10 years, according to a study from the University of Pennsylvania's Wharton School, The Hill is reporting.

The GOP tax plan is expected to be released this week. Based on differing estimates on what it will include, the deficit could jump by as much as $3.5 trillion over the next 10 years, The Hill is reporting. And by 2040, the plan would run as high as $2 trillion to $10.6 trillion.

Treasury Secretary Steven Mnuchin and other administration have said the plan would boost economic growth enough cover the deficit and possibly reduce it, The Hill maintained.

But the study, by President Donald Trump's alma mater, said the tax plan would only boost the economy by only 1.3-1.5 percent, The Hill said. And the plan 's corporate tax reduction would only lead to an increase of 1.3 to 1.4 percent on labor wages over a decade.

But House Speaker Paul Ryan maintained the plan is unlikely to trigger even a bigger deficit.

"We believe that we'll get faster economic growth," Ryan told Reuters. "We don't anticipate a big deficit effect from this tax reform because we will broaden the base and lower the rates, plug loopholes and get faster economic growth . . . Those things combined, we believe, will give us faster growth and a more resilient tax code."

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