The House Republicans’ tax package is now projected to cost nearly $4 trillion, as government forecasters revealed on Wednesday. This increase is attributed partially to a last-minute agreement to raise the cap on state and local tax deductions.
Revised Cost Estimates
The legislation that received approval last week in the House is now estimated to have a price tag of $3.94 trillion over the upcoming decade, as confirmed by the official Joint Committee on Taxation.
Factors Contributing to the Increase
The revised cost includes a $129 billion addition due to an agreement with several blue-state Republican holdouts to raise the SALT cap to $40,000, up from the initially planned $30,000. Currently, the cap stands at $10,000.
Furthermore, lawmakers managed to enhance savings from a clean energy investment credit, which is now projected to yield $172 billion, compared to the initial $155 billion.
Future Senate Considerations
Although the House budget accommodates the $4 trillion plan, the Senate has yet to finalize its intended expenditure on tax cuts. This indicates a possibility of further expansion in the package.
As Congress resumes work post the Memorial Day recess, the Senate will take center stage in deliberations over the legislation, with expectations of additional modifications.
