As reported by the House Committee on Ways and Means on September 24, 2018
H.R. 6760, the Protecting Family and Small Business Tax Cuts Act of 2018, would repeal the December 31, 2025, expiration date for numerous provisions of U.S. tax law that were temporarily changed by the 2017 tax act (Public Law 115-97). The bill would make permanent the individual income tax brackets and tax rates, standard deduction and child tax credit amounts, business income deduction, and exemption amounts for the Alternative Minimum Tax in effect under current law. Deductions for personal exemptions and certain itemized deductions would be permanently repealed.
Because of the magnitude of the estimated budgetary effects, this bill is considered to be “major legislation,” as defined in sections 4107 and 5107 of H. Con. Res. 71, the Concurrent Resolution on the Budget for Fiscal Year 2018. Hence, this cost estimate prepared by CBO and the staff of the Joint Committee on Taxation (JCT) incorporates the federal budgetary effects of changes in economic output and other macroeconomic variables that would result from enacting the legislation.
Specifically, JCT estimates that enacting the bill would increase deficits by about $545 billion over the 2019-2028 period. That estimate includes two components. First, excluding macroeconomic feedback effects, JCT estimates that the bill would increase deficits by about $631 billion over the 2019-2028 period. In addition, the macroeconomic feedback would reduce deficits by about $86 billion over that period, JCT estimates. Most of those effects, both with and without the macroeconomic feedback effects, would result from changes in revenues.
JCT estimates that enacting H.R. 6760 would increase on-budget deficits by more than $5 billion in at least one of the four 10-year periods beginning in 2029. CBO and JCT estimate that enacting the legislation also would increase net direct spending by more than $2.5 billion in at least one of the four consecutive 10-year periods beginning in 2029. Those estimates include macroeconomic feedback.
JCT has determined that the tax provisions of the bill contain no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).
This updated cost estimate supersedes the cost estimate for H.R. 6760 that CBO transmitted on September 21, 2018. This estimate has been updated to incorporate the macroeconomic analysis prepared by JCT, which was not available at the time of filing of the committee report, but the estimate is otherwise unchanged.