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Wharton Study: GOP Tax Bill Increases Debt More Than $1.5T

Image: Wharton Study: GOP Tax Bill Increases Debt More Than $1.5T
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By    |   Tuesday, 12 December 2017 10:51 AM

The University of Pennsylvania's Wharton School released a study Monday that shows the GOP's tax legislation would add more than $1.5 trillion to the deficit over the next decade.

By 2040, President Donald Trump's alma mater says the deficit would increase by as much as $3.1 trillion.

Wharton's study does not agree with the administration's that Gross Domestic Product will increase enough to pay for the cuts.

"By 2027, under our standard economics assumptions, GDP is projected to be between 0.5 percent and 1.0 percent larger, relative to no tax changes," Wharton's study reads. "Debt increases between $1.8 trillion and $1.9 trillion, inclusive of economic growth. By 2040, GDP is projected to be between 0.4 percent and 1.2 percent larger under our baseline assumptions, and debt increases by $2.6 to $3.1 trillion."

The Treasury Department on Monday issued a report that the tax legislation would generate $1.8 trillion in new revenue over 10 years.

"The Senate Tax Cuts and Jobs Act has effects beyond federal revenues, including effects on GDP, labor income and U.S. capital services," Wharton says. "By 2027, GDP is between 0.5 percent and 1.0 percent larger than current policy in that year. However, this initial boost fades over time as more debt accumulates. By 2040, GDP is between 0.4 percent and 1.2 percent larger than current policy in that year."

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The University of Pennsylvania's Wharton School released a study Monday that shows the GOP's tax legislation would add more than $1.5 trillion to the deficit over the next decade.
tax, debt, wharton study, gop
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2017-51-12
Tuesday, 12 December 2017 10:51 AM
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