The fiscal hawks at the Committee for a Responsible Federal Budget updated their charts to include the analysis of the final tax bill made by the Joint Committee on Taxation in late December. Unlike the CBO, the JCT incorporated dynamic effects from the bill – the economic growth and resulting increase in tax revenues created by the changes in the tax system – into its projections.
The findings were underwhelming, though largely consistent with just about all of the other dynamic scores of various iterations of the bill. JCT found that the tax overhaul will boost economic growth by 0.7 percent over 10 years, with most of the benefit coming in the first few years and then fading over time. CRFB summarized the JCT analysis: “This results in the final bill increasing average GDP growth by just 0.01 to 0.02 percentage points per year over a decade. In other words, it will improve growth by one-fortieth to one-twentieth of the 0.4 percentage points claimed by some of the bill's advocates.”
The JCT’s dynamic model projects a lower overall cost than the static analysis by the CBO, but not by a whole lot. “While some have claimed that growth will ensure the bill does not add to deficits, growth will actually only offset a little more than one-quarter of the bill's $1.46 trillion conventional costs (and one-fifteenth of its gross costs),” CRFB wrote in summary. “On a dynamic basis, the legislation would still cost $1.07 trillion over a decade – excluding interest and the hidden cost of gimmicks.”