WASHINGTON – Former President donald trump continues to add new tax cuts to his list of campaign promises, and the projected costs continue to pile up.
Independent analyzes suggest that Trump’s plans could add close to $4 trillion over the next decade to the already growing US national debt, even after taking into account additional revenue from new taxes he intends to impose on imports.
It’s impossible to make a similar estimate for Vice President Kamala Harris, Trump’s Democratic opponent this fall. She did not present any fiscal or spending plans, or other economic policy proposals, with enough detail to estimate whether they would increase deficits or reduce them.
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Total federal debt is now about $35 billion, up from about $20 billion when Trump took office in 2017, Treasury Department data shows. It grew by about $7.8 billion under Trump and grew by about $7.3 billion under Trump. President Joe Bidenwatch so far.
Deficit hawks in Washington warn that further acceleration would increase the risks of an economically debilitating spiral, where rising debt would increase borrowing costs in financial markets. This would cause the debt to increase even more.
“It’s much more concerning now because the overall fiscal and economic environment is much worse” than it was before Trump and Biden took office, said Marc Goldwein, senior vice president of the nonpartisan Committee for a Responsible Federal Budget in Washington.
The next president will already face what the nonpartisan Congressional Budget Office predicts will be growing deficits, spurred in part by more retired baby boomers starting to withdraw Social Security and Medicare benefits. The budget office expects the debt to grow by $14 billion over the next decade, even if Congress and the next president do not approve any new tax cuts or major spending programs.
Trump has proposed several additional tax cuts that would add to these projections, many of them designed to appeal to voters struggling with household expenses. They include eliminating federal income taxes on retirees’ Social Security benefits and on money-services workers, such as servers and ride-sharing drivers, who earn from tips. He would further reduce the corporate income tax rate to 15%, down from the 21% rate he approved as part of a 2017 tax overhaul package.
Trump also wants to extend expired tax cuts for people and businesses that were included in the 2017 tax law.
Taken together, Trump’s proposed tax cuts would reduce federal revenues by nearly $7 billion over a decade, according to estimates and a tax calculator created by the Committee for a Responsible Federal Budget. The amount added to the national debt would be even greater than that if we consider the additional interest costs of servicing the federal debt.
Trump has proposed several plans that would offset some of these revenue losses. They include the repeal of tax incentives for clean energy production and other low-emissions technologies contained in Biden’s 2022 climate law, the Reducing Inflation Act. Trump would also impose exorbitant new tariffs on imports from China and a 10% tariff on all imported goods.
Other analyzes project that the repeal of the Inflation Reduction Act and the two new tariffs could collectively generate about $3 billion in additional federal revenue, leaving Trump with a net revenue loss of about $4 billion.
Trump has said he will fill the gap with unspecified “wasteful” cuts to the federal budget. Just as he did when he first ran for president in 2016, he has stated that he will pay off – or even fully pay off – the national debt. More recently, he suggested that he could use cryptocurrency to eliminate debt. This is effectively impossible for several reasons, starting with this: all the bitcoin in the world is currently worth just over US$1 trillion, nowhere near the total value of the debt.
“Who knows?” Trump told Fox Business in an interview this month. “Maybe we’ll pay our $35 trillion and hand them a little crypto check, right? We’ll hand them some bitcoin and wipe out our $35 trillion.”
A Trump campaign spokesperson did not respond to a request for comment this week.
Harris, who began seeking the Democratic nomination late last month immediately after Biden stepped aside and endorsed her, has no policy proposals posted on her campaign website — economic or otherwise.
Biden released a budget in March that calls for about $3 trillion in deficit reduction over the next decade, largely through tax increases on businesses and high earners. It contains big tax questions, like how to pay for Biden’s plan to extend Trump-era tax cuts for people making less than $400,000 a year.
Harris campaign officials did not directly answer whether that budget is an effective model for her agenda.
Her aides also sought to contrast Harris with Trump on economic issues, avoiding questions about deficits.
Charles Kretchmer Lutvak, a spokesman for Harris, called the election “a choice between Vice President Harris, with her proven record of fighting for workers while fighting corporations and price gouging to reduce costs” versus the “plan Trump to cut taxes for the ultra-rich and large corporations.”
Asked for details about Harris’ tax platform, campaign officials referred to her speech, including recent comments in Atlanta. In them, Harris discusses fiscal and spending plans only in general terms, including promises of “affordable health care, affordable child care, paid leave.” She does not offer details that allow even a rough estimate of her scheduling costs.
Since becoming nominated, Harris does not appear to have mentioned budget deficits or the federal debt in any comments.
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