Donald Trump’s plan increases budget recent surge of tax-cut pledges has plunged his fiscal strategy deeply into deficit territory, projecting to elevate budget shortfalls by more than double the amount proposed by his Democratic opponent, Kamala Harris. This assertion comes from a comprehensive analysis regarding the candidates’ financial proposals.
Impact of Tax Policies on Budget Deficits
According to the Committee for a Responsible Federal Budget (CRFB), a nonpartisan organization advocating for reduced deficits, Trump’s combination of tax reductions, increased tariffs, military expansion, and widespread deportations is estimated to exacerbate budget deficits by approximately $7.5 trillion over the next decade. In contrast, Vice President Harris’s agenda—which includes social-policy spending, tax cuts for the middle class, and tax hikes on corporations and affluent households—would lead to a $3.5 trillion rise in deficits.
Trump’s plan increases budget tax cuts risk worsening deficits significantly compared to Harris’s fiscal strategy, according to wsj news.
Existing Debt and Future Projections
These augmented deficits would compound the projected $22 trillion in budget deficits for the U.S. over the next ten years if Congress takes no action. Following numerous rounds of tax reductions and emergency expenditures, the nation’s publicly held debt has now surpassed $28.3 trillion. This debt level is now comparable to the size of the economy, and without new policies, the nation’s debt-to-GDP ratio is expected to exceed post-World War II records due to an aging population and a persistent gap between government revenue and expenditure.
Risks of Escalating Debt
Economists caution that the escalating debt poses risks; however, U.S. growth remains robust for the moment, and the country is not currently facing a fiscal crisis. Both candidates have prioritized promises to voters over necessary spending cuts or tax increases required to fund those policies. Each has proposed initiatives that could stimulate economic growth, such as business tax incentives and consumer tax cuts, while also advocating measures that might hinder growth, such as Harris’s tax hikes and Trump’s tariffs. According to the study, under both proposals, national debt would continue to outpace economic growth.
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Trump’s Tax Cut Proposals
“Clearly, neither candidate is steering towards stabilizing the debt,” stated Marc Goldwein, senior vice president at the CRFB. He noted that Trump, in particular, has layered proposed tax cuts on top of existing reductions. Beyond advocating for the extension of his 2017 tax cuts, he has committed to abolishing taxes on gratuities. Additionally, Trump plans to eliminate taxes on Social Security benefits and overtime pay, which may affect budget stability. Furthermore, he has promised to reinstate the deduction for state and local taxes, previously capped at $10,000 by the 2017 tax legislation.
Inadequate Tariff and Energy Policies
According to the analysis, his tariffs and energy policies fall significantly short of balancing the budget. “President Trump began promising a new tax cut at every rally, and those promises accumulated,” Goldwein remarked. “Six weeks ago, their proposals were somewhat similar. That is no longer the case.”
Discrepancies in Budget Projections
Campaign proposals often lack the specificity found in subsequent legislation, and evaluating clear policies remains an imprecise endeavor. For instance, congressional analysts and the U.S. Treasury Department differ by $469 billion in their projections regarding the effects of raising the corporate tax rate to 28%. Estimates suggest Trump’s deficits could range from as low as $1.45 trillion to as high as $15.15 trillion, while Harris’s could vary from breakeven to $8.1 trillion.
Harris’s Commitments and Tax Strategy
Harris has committed to ensuring no tax increases for households earning under $400,000, necessitating the extension of Trump’s expiring tax cuts. She has also advocated for enhanced tax credits for families with children and first-time homebuyers. Additionally, Harris supports specific businesses and new federal investments in paid leave and childcare. She has backed many of President Biden’s proposed tax increases, including elevated rates on capital gains. Moreover, Harris also supports higher corporate profit taxes to ensure fair contributions from wealthier entities.
Campaign Responses and Economic Feasibility
I will ensure that the wealthiest among us, who can afford it, pay their fair share in taxes, she stated. This statement was made on CBS’s “60 Minutes,” specifically targeting increased contributions from billionaires and corporations. A representative from the Harris campaign contested the CRFB analysis, claiming her budgets as president would lead to reduced deficits. Harris’s supporters argued that the analysis includes costs for policies she has not endorsed. They also noted that the lower breakeven estimate aligns more closely with her proposals.
The Challenge Ahead
Harris’s economic policy agenda emphasizes a commitment to funding initiatives and curbing budget deficits. However, implementation may be challenging. Trump’s plan increases budget deficits, and Goldwein cautioned that resistance to tax increases could hinder these efforts. He expressed optimism, stating, “I genuinely believe they will strive to govern in this manner,” despite the many challenging elements involved.
In a statement, Brian Hughes, a senior advisor to Trump, attributed the strong economic growth to Trump’s 2017 tax cuts. He emphasized that “President Trump’s plan will curtail wasteful spending, combat inflation, alleviate interest burdens, and stimulate economic growth.” Hughes argued that these measures would increase federal revenue significantly. Ultimately, he believes this approach will enable the restoration of the greatness of the economy.
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