According to the Financial Times, which reported the report, it is expected to swell US federal debt By 2035, $7.5 trillion if the former president wins the White House and implements his pledge to reduce taxes on individuals and companies, impose significant tariffs on imported goods, and deport millions of immigrants.
It is estimated that the program of the US Vice President and candidate for the Democratic Party is complete Harriswhich includes expanding small business tax credits, improving access to child care and affordable housing but increasing corporate taxes, would increase the debt by $3.5 trillion over the same period.
The report, which warned of the high risk of a “potential financial crisis,” comes just five weeks before the US presidential elections. Opinion polls indicate a fierce competition between the two candidates, who have made the economy a focal point in their campaigns.
“The next president will face significant fiscal challenges upon taking office, including record debt levels, large structural deficits, rising interest payments, and the bankruptcy of critical credit fund programs,” the committee wrote in its report. It also warned of slowing economic growth and weakening national security due to the country’s high debt burden.
The analysis also highlights the extent of abandonment Trump About the “cloak of financial prudence” that Republican candidates and conservative politicians often wear when running for office. In addition to extending the tax cuts he approved in 2017, he pledged Trump Recently with age Tax cuts new if he wins office again.
These proposed measures have ranged from a new reduction in the corporate tax rate to individual-level tax cuts on income from overtime wages, tips and pensions. Trump also promised to eliminate caps on tax deductions for state and local tax payments, which was particularly disliked by wealthy suburban homeowners.
According to the CRFB, these tax cuts and other exemptions alone would increase Religion About $9 trillion. Comprehensive customs tariffs and other fees are expected to compensate for this increase by about $3 trillion.
In the past, Republicans have called for deep spending cuts, including on government health care and pension programs, to offset tax-cut plans. But Trump said he does not want to cut those plans, and wants to cut spending on a much smaller slice of the government budget that affects other domestic programs, while also relying on Customs duties To enhance and increase revenues.
The cost of the Harris Economics program
On the other hand, the most expensive parts of Harris’ economic platform revolve around the tax cuts and credits she wants to extend to families earning $400,000 or less as well as families with young children.
In total, these taxes are expected to increase the federal debt by more than $4 trillion, which will be partially offset by a windfall of about $1 trillion resulting from increasing the corporate tax rate from its current level of 21 percent. While President Joe Biden supported a significant increase in the capital gains tax rate, from 20 percent to 39.6 percent, Harris proposes to raise these taxes by a smaller amount, to 28 percent, which limits the expected revenue increase.
Given the enormous uncertainty about who will win the upcoming election, what policies will be enacted and how the economic outlook might change, the range of outcomes for debt is very large, as the Federal Reserve noted in its report.
At best, Harris’ program would not increase the deficit, and at worst it could increase it by $8.1 trillion. As for Trump, it ranges from an increase of $1.45 trillion to an increase of just over $15 trillion.
The US national debt is 99 percent of GDP, according to the Congressional Budget Office, and is expected to rise to 125 percent 10 years from now if there are no changes to current laws.
With a Harris victory, that proportion would rise by 8 percentage points to 133 percent of GDP. As for Trump, it will rise by 17 percentage points to 142 percent of GDP.
