Former President Donald Trump’s economic proposals have been analyzed to have a significant impact on federal deficits over the next decade. The nonpartisan Penn Wharton Budget Model conducted a study which revealed that Trump’s policies would result in an increase of $5.8 trillion in deficits. This is a substantial amount, almost five times more than the $1.2 trillion increase predicted by the analysis of Vice President Kamala Harris’ proposals.
Trump’s Proposal Details
The report on Trump’s economic plans highlighted several key points that would contribute to the increase in deficits. One major aspect is his intention to permanently extend the 2017 tax cuts, which is predicted to add over $4 trillion to deficits over the next 10 years. Additionally, Trump’s proposal to eliminate taxes on Social Security benefits comes with a $1.2 trillion price tag, and his plan to further reduce corporate taxes would add nearly $6 billion.
On the other hand, the analysis of Kamala Harris’ economic proposals outlines a different approach. Her plan involves expanding various tax credits such as the Child Tax Credit and the Earned Income Tax Credit, which would raise deficits by $2.1 trillion over a decade. Furthermore, her proposal to provide a $25,000 subsidy for qualifying first-time homebuyers is estimated to add $140 billion in deficits.
The Harris analysis also considers the potential to offset the costs of her spending. One suggestion is to raise the corporate tax rate to 28%, generating approximately $1.1 trillion in revenue. Harris has also expressed support for the revenue raisers in President Joe Biden’s budget proposal for the 2025 fiscal year, totaling $5 trillion. However, it is important to note that most of these revenue streams would require congressional approval.
A contrast between Trump and Harris’ approaches is evident in the methods proposed to fund their agendas. Trump’s suggestion involves implementing 10% tariffs on all imports and 60% tariffs specifically on Chinese imports, which would not require congressional approval. It is argued by Trump that these trade policies would lead to long-term domestic growth outweighing the short-term costs. However, economists have expressed concerns about the potential for inflation and economic instability with such a tariff policy.
Campaign Responses and Strategies
Both the Trump and Harris campaigns are actively engaging in a narrative to portray the other side as an economic threat. Harris’ campaign spokesperson criticized Trump’s economic agenda as an “inflation and deficit bomb” disproportionately impacting the middle class. In contrast, the Trump campaign defended his economic record, emphasizing his success in building a strong economy. The competition for voter support is intense, with both sides aiming to address concerns about the cost of living.
Economic Vulnerabilities and Campaign Priorities
The analysis of the economic proposals of both candidates reflects a larger narrative in the current political landscape. With the economy being a focal point of contention, the Harris campaign has been swift in presenting its economic agenda following Biden’s exit from the race. This urgency is driven by the recognition of the economy as a crucial factor for voter sentiment, particularly in light of the nostalgia for the pre-pandemic economic conditions under the Trump administration.
The economic proposals of Donald Trump and Kamala Harris offer contrasting approaches to economic policy and fiscal management. The analysis of these proposals underscores the significant impact they could have on federal deficits and revenue generation. As the campaigns intensify their efforts to win over voters, the debate surrounding economic priorities and strategies continues to shape the narrative of the upcoming election.