(Bloomberg) -- Republican tax cuts will boost U.S. growth by about 0.7 percent on average through 2028, with the economic benefits peaking in 2022, according to the Congressional Budget Office.
“By lowering the corporate income tax rate, the act gives businesses incentives to increase investment, and by lowering individual income tax rates through 2025, it gives people incentives to increase their participation in the labor force and their hours worked,” the non-partisan arm of Congress said in a report Monday.
The economic boost will start fading in 2023, when many of the provisions in the tax law begin phasing out, according to CBO.
CBO also estimates the government will have to increase borrowing to help fund the tax cuts, which eventually will reduce the resources available for private investment. The Trump administration says the tax cuts will pay for themselves by boosting economic growth.
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