The Joint Committee on Taxation (JCT) has revealed that the tax portion of Republicans’ sweeping legislative bill, one that heavily incorporates President Donald Trump’s domestic agenda would cost the U.S. government an estimated $3.7 trillion through 2034.
This amount fits inside the $4.5 trillion budget threshold previously agreed by Congress in its fiscal framework, allowing the House Ways and Means Committee to make amendments that will increase the national deficit.
According to the JCT’s detailed tables, maintaining Trump-era tax cuts, which were first offered in 2017, as well as various other fiscal ideas, will increase the national deficit by nearly $5 trillion.
However, these expenses would be substantially offset by around $2 trillion in savings resulting from reduced renewable energy incentives and more vigorous international tax enforcement. These values are compared to the Congressional Budget Office’s (CBO) January 2025 baseline predictions.
Republicans have had mixed reactions to the proposal, w hile some remain cautiously supportive, others, particularly fiscal conservatives, express concern about the growing deficit. Rep. Chip Roy (R-TX) highlighted the need for additional improvements before expressing his full support.
“I remain open-minded because progress has been made based on our forceful efforts to force change,” Roy stated. “But we cannot continue down the path we’ve been going down.”
At the heart of the GOP proposal is the extension of individual income tax rate reductions from the 2017 Trump tax cuts. These reduced marginal tax rates, set at 10%, 12%, 22%, 24%, 32%, 35%, and 37%, are projected to slash federal revenues by $2.2 trillion over the next 10 years.
Maintaining the increased standard deduction $29,200 for married couples and $14,600 for individuals in 2024, will cost another $1.3 trillion. However, JCT notes that the elimination of personal exemptions helped offset those costs, adding $1.8 trillion in revenue through 2034.
Another expensive element is the extension of the alternative minimum tax (AMT) exemption, which alone could reduce federal revenues by $1.4 trillion.
The package also includes an expansion of the child tax credit (CTC), expected to cost $800 billion, and enhanced deductions for pass-through businesses, priced at $700 billion.
Other proposed tax reliefs include:
- $40 billion for eliminating taxes on tips,
- $124 billion for removing taxes on overtime,
- $71 billion for a new senior deduction, and
- $57 billion for excluding car loan interest from taxable income.
Meanwhile, modest revenue increases are expected from modifications to the Earned Income Tax Credit, projected to bring in $15 billion, and stepped-up international tax enforcement, expected to yield $116 billion.
Significant federal savings will also come from reversing clean energy initiatives under the Inflation Reduction Act. Key cuts include:
- $78 billion by terminating the clean vehicle credit,
- $104 billion by removing the commercial clean vehicle credit, and
- $154 billion by canceling the clean electricity investment credit.
Although the bill offers a range of tax breaks and seeks to solidify Trump’s 2017 tax vision, the JCT report highlights the substantial fiscal implications that could reignite deficit concerns among both parties.
