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We estimate the Senate-passed reconciliation bill increases primary deficits by $3.1 trillion over 10 years. The dynamic cost, including changes to the economy, is larger at $3.5 trillion. GDP falls by 0.3 in 10 years and falls by 4.6 in 30 years.

. (2/2) GDP remains mostly flat, and wages fall by 0.3 percent. Dynamic costs exceed conventional costs in the budget window.

If spending and tax changes in the House-passed reconciliation bill are made permanent, federal debt increases by 9.9 percent in 10 years and 21.9 percent in 30 years. (1/2).

. (2/2) GDP rises slightly, as labor supply and savings respond to a reduced social safety net, but the dynamic score is larger ($3.2 trillion) than the conventional.

We estimate the House-passed reconciliation bill increases primary deficits by $2.8 trillion over 10 years. (1/2).

(3/3). PWBM has projected that America will face certain risk of a fiscal crisis within the next two decades, eroding household purchasing power, unless action is taken to reduce federal deficits.

(2/3). This cost is an addition to a SALT limit of $30,000, which PWBM estimates to cost $224.6 billion, relative to the current $10,000 limit. The total cost of the $40,000 SALT cap, relative to the current $10,000 cap, is $333.7 billion.

Penn Wharton Budget Model estimates that increasing the SALT limit from $30,000 to $40,000, with a phase-out starting at $500,000, will add another $109.1 billion in primary deficits over the 10-year budget window. (1/3).

If spending and tax changes in Reconciliation are made permanent, federal debt increases by 11.1% in 10 years and 24.3% in 30 years. GDP remains flat and wages fall by 0.5%. Dynamic costs exceed conventional costs in the budget window. #TCJA.

We estimate the House reconciliation bill increases primary deficits by $3.3 trillion over 10 years. Even so, GDP rises in the short and long term, as precautionary increases in labor supply and savings respond to a reduced social safety net.

. (5/5)

. (4/5) Option 3: Extend the TCJA but introduce a new top rate that taxes ordinary income above $2.5 million ($5 million for married filing jointly) at 39.6%. This option reduces the cost of TCJA extension by $22 billion over 10 years.

. (3/5) Option 2: Extend the TCJA but introduce a new top rate that taxes ordinary income above $1 million at 39.6% for all filers. This option reduces the cost of TCJA extension by $222 billion over 10 years.

. (2/5) Option 1: Extend the TCJA except for the top rate, which would revert to its 2017 level. Ordinary income above $547K (single) / $615K (married filing jointly) would be taxed at 39.6% starting in 2026. This reduces the cost of TCJA extension by $402 billion over 10 years.

Under current law, the 2017 Tax Cuts and Jobs Act (TCJA) will expire at the end of 2025, raising personal income tax rates back to 2017 levels. Some lawmakers propose extending the TCJA but with higher rates for high-income households. We consider three options. (1/5).

. (2/2) Our new analysis considers several options to make the business tax extenders portion permanent using a combination of different horizons for spending cuts and individual tax extenders.

Our previous analysis demonstrated that the Trump Administration's major tax proposals would require expiration if combined with the FY2025 House budget reconciliation. (1/2).

. (2/2) Read the full brief here: #TaxPolicy #FiscalPolicy #Tariffs #PWBM.

Treasury data through April 28 shows that tax receipts are broadly in line with government projections made earlier this year, before the downsizing of the IRS was announced. Receipts from tariffs have significantly exceeded projections. (1/2). .

. (2/2) Full analysis: . #Tariffs #Wharton #EconomicPolicy.