In order to finance her new policy goals, Kamala Harris is supporting trillions of dollars in more tax revenue. Her team is criticizing Donald Trump for not outlining how he would pay for the multitrillion-dollar platform he is running on.
In a statement to NBC News, James Singer, a spokesman for the Harris campaign, called Trump’s policy “an inflation and deficit bomb.” This prompted a response from the Trump campaign accusing her of enacting a “Biden-Harris inflation tax.”
Nonpartisan estimates place Harris’s proposed tax revenue raises at $5 trillion over ten years, and spending at roughly $2 trillion. With less than $3 trillion in tariff money, Trump is advocating for around $5 trillion in tax benefits and expenditure increases.
Mark Zandi, chief economist of Moody’s Analytics, stated, “VP Harris is being much more fiscally disciplined than President Trump, hands down.”
He described it as “a clear signal that they plan to be fiscally disciplined, whatever the policies may be.” And that is a little surprising. Republican rallying cries have always centered on budget deficits and economic restraint.
A spokesman for Harris’ campaign claimed that she is in favor of the $5 trillion in additional tax revenue included in the White House budget that was unveiled in March. This includes raising the corporate tax rate from 21% to 28%, removing the Trump tax breaks for high incomes the following year, and imposing a number of other taxes on Americans who are wealthy.
According to the Committee for a Responsible Federal Budget, a research organization that advocates for reducing red tape, Harris’ recommendations to slash housing, child care, and prescription medication costs would come at a cost of around $1.7 trillion.
Zandi concurred with that assessment, estimating that, before offsets, the new Harris programs would cost between $1.5 trillion and $2 trillion.
He stated, “so over the 10-year budget horizon, she should have about $3 trillion in deficit reduction at the very least.” “I don’t know of any deficit reduction plan that even approaches that.”
In especially in crucial swing states where they may be decisive, Harris is attempting to turn the tables on fiscal responsibility and create a framework that will allow moderate Republicans and center-right voters who are dubious of Trump to endorse her candidacy. As a presidential contender in 2019, she supported several left-wing ideas, including a Green New Deal and Medicare for All, which she has since renounced.
The Committee for a Responsible Federal Budget’s senior policy director, Marc Goldwein, issued a warning, pointing out that the Harris campaign hasn’t allocated all $3 trillion for deficit reduction.
He said, “They’ve also indicated that they have plans for paid time off, long-term care, and child care.”
Furthermore, he pointed out that her revenue-raisers would be impacted if Trump’s tax cuts for lower earnings were extended in 2025.
He remarked, “We simply haven’t seen the entire plan yet.”
Trump asserts that “tremendous growth” will cover the cost of his costly policies.
In the meanwhile, Trump and his team have advocated for keeping the tax cuts they enacted in 2017 in addition to doing away with Social Security payroll taxes, doing away with tip taxes, and raising the child tax credit to $5,000.
All of his initiatives together, according to Zandi, would cost almost $5 trillion.
When reporters asked how he would finance his ambitions on Friday in Las Vegas, Trump said, “Growth.” We’re going to expand incredibly. There will be significant growth.
That’s not a serious offer, according to Goldwein.
“I think tremendous expansion is a terrific concept! I’m not sure why, but in every prior government, we didn’t do it,” he said. “But no, you’re not going to get out of this by growing.”
One of Trump’s main suggestions for increasing government income is imposing additional tariffs on imports: a 10% global levy and a 60% tariff on products coming from China. Zandi estimated that the potential income may reach $2.5 trillion. According to the Tax Policy Center, Trump’s tariffs would reduce U.S. imports by 15% while generating an estimated $2.8 trillion in income.
Even while some of Trump’s proposed tax benefits are beneficial for economic growth, Goldwein said that the administration’s mass deportation and tariff plans might hinder growth.
Hence, to begin with, it’s unclear where he wants to take things when you consider his entire agenda. It may be in favor of or against growth, he stated. “However, the scale will undoubtedly not be such that it supports trillions upon trillions of additional borrowing dollars in a pro-growth manner.”
Following the election, Congress is expected to have a significant tax discussion in 2019 because a large portion of the Trump tax cuts from 2017 are scheduled to expire at the end of 2025. Which sections will be expanded is unknown.
Trump ideas are dubbed “an inflation and deficit bomb” by the Harris campaign.
Singer projected that average Americans will ultimately foot the bill for larger deficits under Trump’s promises.
Singer stated via email that “the middle class will pay for Donald Trump’s agenda: with higher costs, cuts to Social Security and Medicare, and less economic opportunity.” In contrast, Harris “will make big corporations and billionaires pay their fair share while she builds up the middle class,” the man claimed.
Karoline Leavitt, a spokesman for the Trump campaign, responded by calling the Biden-Harris administration’s spending “reckless” and asserting that “America faces an inflationary spending problem, not a revenue problem.” She said that despite the fact that American oil production and exports have hit all-time highs under the Biden administration, Trump will want to increase them.
Leavitt declared, “President Trump will reduce unnecessary government spending and turn America back into a net energy exporter in order to help balance our country’s budget and pay off our mounting debts.”
In addition, Trump has hinted that he may lower taxes even more on people and corporations in the upcoming year, which would increase his red-ink predictions.
The Trump 2017 tax reduction, according to Zandi, “did lift growth in terms of corporate investments,” but it “didn’t come close to paying for itself”; further cuts would result in higher tax bills.
“It’s not possible for him to grow that much,” he stated. “The tax cuts financed by the deficit simply cannot be sustained.”
