President Donald Trump’s tax cuts for corporations, the wealthy and individuals will cost the U-S economy $1.6 trillion over the next decade, according to a report by the Institute for Policy Studies.
The $1 trillion in lost tax revenue comes from tax credits that lower the tax burden for businesses.
The White House has said the $1 billion in lost revenue will be offset by new tax revenue.
The IPS report estimated that, under current law, the tax cuts would increase U.s. economic output by $1,817 billion over 10 years.
Under the Trump tax bill, the IPS estimate would be $1.,838 billion.
The Institute for Taxation and Economic Policy (ITEP), which provides nonpartisan analyses to lawmakers, said in a statement the new tax code could add $716 billion to GDP.
The tax code will cost $1 in 2018, $3 in 2026, $6.2 in 2027 and $8.5 in 2028, the report said.
“Tax reform will raise revenue, reduce taxes for individuals and businesses, and increase the tax base,” ITEP said.
A recent CBO analysis said the tax reform bill would reduce revenue by $4.4 trillion over 10 year periods.
Under current law the tax code reduces tax rates on businesses, but corporations would still be able to claim a deduction for state and local taxes, which is capped at $10,000.
Under Trump’s bill, corporations will be able for the first time to claim the state and municipal deduction.
“The president’s plan would create the most aggressive tax plan in decades,” said the IEP’s Michael Tanner, who authored the report.
“It would significantly increase tax revenue for corporations and the wealthy.”