Former President Donald Trump and Vice President Kamala Harris have both put forth economic proposals that aim to shape the future of the country’s economy. According to a pair of studies from the nonpartisan Penn Wharton Budget Model, Trump’s proposals would increase federal deficits by $5.8 trillion over the next decade, while Harris’ proposals would add $1.2 trillion.
Analysis of Trump’s Economic Plan
Trump’s plan includes permanently extending the 2017 tax cuts, which would contribute over $4 trillion to deficits over the next 10 years. Additionally, his proposal to eliminate taxes on Social Security benefits has a $1.2 trillion price tag, and further reducing corporate taxes would add nearly $6 billion. Trump aims to pay for his agenda through tariffs on imports, including a 10% tariff on all imports and a 60% tariff on Chinese imports. While Trump believes that these trade policies would generate long-term domestic growth, economists warn that they could lead to inflation and other negative consequences.
Analysis of Harris’ Economic Plan
On the other hand, Harris’ plan focuses on expanding tax credits such as the Child Tax Credit and the Earned Income Tax Credit, which would raise deficits by $2.1 trillion over the next decade. She also proposes a $25,000 subsidy for qualifying first-time homebuyers, adding $140 billion to deficits. Harris plans to offset some of these costs by raising the corporate tax rate to 28%, which could generate $1.1 trillion in revenue. Additionally, she supports revenue raisers in President Biden’s budget proposal for the 2025 fiscal year, which require congressional approval.
While Harris’ revenue streams have the potential to partially offset the costs of her spending, Trump’s proposed tariffs may generate significant revenue. However, the implementation of such hardline tariff policies could lead to inflation and other economic challenges. The Trump and Harris campaigns are actively promoting their economic agendas, each painting the other side as an economic risk to the country.
The campaigns are engaging in a war of words, with the Harris campaign describing Trump’s economic agenda as an “inflation and deficit bomb,” while the Trump campaign touts his business acumen in building the American economy. With just over a month since Biden withdrew from the race, the Harris campaign is under pressure to address economic vulnerabilities that have been a focus this election cycle. Voters’ memories of the pre-pandemic economy under the Trump administration add complexity to the economic debate.
Both Trump and Harris have put forth ambitious economic proposals with significant implications for federal deficits. While Trump’s focus on tax cuts and tariffs may lead to short-term economic gains, Harris’ emphasis on tax credits and corporate tax increases aims to address social and economic inequality. The upcoming election will determine which economic vision will guide the country’s future economic policies.
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