Former President Donald Trump’s economic proposals have been the subject of intense scrutiny, with a recent study from the Penn Wharton Budget Model revealing that his policies would lead to a significant increase in federal deficits. Trump’s plan to extend the 2017 tax cuts permanently alone would add over $4 trillion to the deficits over the next decade. Additionally, his proposal to eliminate taxes on Social Security benefits carries a hefty price tag of $1.2 trillion, while further reductions in corporate taxes would add nearly $6 billion to the deficits.
On the other hand, Vice President Kamala Harris has put forth her own economic proposals, which the studies show would result in a much lower increase in federal deficits compared to Trump’s plan. The analysis revealed that Harris’ plan to expand various tax credits would raise deficits by $2.1 trillion over the next 10 years. Furthermore, her proposal to provide a $25,000 subsidy for qualifying first-time homebuyers would add $140 billion to the deficits.
The study also highlighted that raising the corporate tax rate to 28% could partially offset the costs of Harris’ spending by $1.1 trillion. Harris has also expressed support for the revenue raisers in President Joe Biden’s budget proposal for the 2025 fiscal year, amounting to $5 trillion. However, it is important to note that most of Harris’ revenue streams would require congressional approval, unlike Trump’s proposed tariffs on imports.
While Trump aims to fund his agenda through tariffs on imports, economists have raised concerns about the potential negative impacts of such a policy. Moody’s Chief Economist Mark Zandi estimated that Trump’s tariffs could generate $2.5 trillion in revenue but warned that they could reignite inflation. In contrast, Harris’ revenue streams, although contingent on congressional approval, provide a more traditional approach to funding her economic proposals.
The Trump and Harris campaigns have been engaging in a war of words over their economic platforms, each trying to portray the other as an economic risk. While the Harris campaign criticizes Trump’s economic agenda as an “inflation and deficit bomb,” the Trump campaign defends his record as a successful businessman who led the country to economic prosperity. This rhetoric reflects the intense competition between the two sides to win over voters who are concerned about the rising cost of living.
As the Harris campaign works rapidly to unveil its economic agenda following Biden’s exit from the race, the pressure is on to address the economy, which has been a weak point for the Democratic campaign. With voters looking back fondly on the pre-pandemic economy under the Trump administration, both campaigns understand the importance of presenting a robust economic plan to win over undecided voters.
The economic proposals of Trump and Harris present contrasting visions for the future of the country’s economy. While Trump’s reliance on tariffs raises concerns about inflation and trade wars, Harris’ emphasis on tax credits and subsidies aims to address social and economic issues. The upcoming election will ultimately determine which economic agenda resonates most with the American public.
Leave a Reply