By Ben Jaros, Josh Rauh, and Daniel Heil

The tax package preserves key pro-growth reforms but layers on costly carveouts and distortionary phaseouts.

On Wednesday, the House Ways and Means Committee advanced tax legislation as part of the One, Big, Beautiful Bill. Big is right. According to the Joint Committee on Taxation (JCT), the tax provisions would increase non-interest deficits by $3.8 trillion over the next decade.

Depending on which page you turn to, the bill reads like a model of optimal tax policy—lower rates, the shrinking of some deductions and credits, and pro-growth incentives. But flip the page, and you’ll find a growing list of new deductions and credits that serve different special interests compared to the old ones, along with phaseouts and cliffs that raise marginal tax rates for some filers.

In short, the bill contains some victories for pro-growth tax policy—but it also repeats old mistakes, layering new complexity into an already unwieldy code, while almost certainly increasing future deficits.

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