A trader looks upward as flags fly half staff outside the New York Stock Exchange today. (Photographer: Daniel Acker/Bloomberg News)

House GOP Tax Bill Estimated to Add $1.49 Trillion to Deficit

(Bloomberg) -- The House Republican tax writers’ plan is estimated to add $1.49 trillion to the deficit over a decade -- just fitting in under the amount allowed under the congressional budget adopted last week.

Tax changes for individuals and pass-through businesses, including rate cuts, doubling the standard deduction, repealing the alternative minimum tax and phasing out the estate tax would result in a net cost of $930 billion, according to one of the official congressional scorekeepers, the Joint Committee on Taxation. Corporate tax code changes would add $847 billion to the tab, while international tax provisions would offset $285 billion of that amount.

Blowing a hole in the budget is a problem for some key lawmakers. Republican Senator Bob Corker said Thursday that he’d like to ensure that the bill "will not add to the deficit" and called for eliminating “a minimum of $4 trillion in loopholes and special interest deductions.”

A separate report Thursday from the Committee for a Responsible Federal Budget said tax cuts for individuals would result in a net cost of $300 billion, when factoring in the repeal of deductions for state and local income and sales taxes, and limits on the property tax and mortgage interest deductions. Repealing the estate tax by 2024 would add almost $200 billion to the tab, CRFB said.

Cutting the corporate rate to 20 percent from 35 percent is estimated to cost $1.5 trillion, and allowing certain pass-through businesses to take advantage of a lower 25 percent rate would lose about $448 billion, according to CRFB. Those provisions would be partially offset by limiting corporate interest deductions, eliminating certain credits and preventing companies from moving their profits offshore.

Republicans under their budget resolution must stay within a total of $1.5 trillion in net deficit increases for the bill to pass the Senate without Democratic support. House Ways and Means Chairman Kevin Brady said there may be minor tweaks in the coming days.

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