Trump’s economic plans would cost more than $4 trillion: Analysis

A series of tax and spending proposals by former President Donald Trump would increase the federal budget deficit by more than $4 trillion over the next 10 years, according to a

analysis through the Penn-Wharton budget model.

Trump’s proposals were evaluated on both a static and dynamic basis, with the latter approach incorporating feedback loops from politics to economics to tax revenues. On a conventional static basis, Penn Wharton analysts estimated the cost of Trump’s proposals over 10 years at $5.8 trillion, while on a dynamic basis they estimated it at $4.1 trillion.

Here is a breakdown with static cost information:

* Extension of individual tax relief through the TCJA: Trump has promised to extend the individual tax cuts from the Tax Cuts and Jobs Act of 2017, which are currently set to expire at the end of 2025. This would cost an estimated $3.3 trillion between 2025 and 2034.

* Abolition of taxes on social benefits: Trump called for the abolition of taxes on social benefits. Analysts concluded that this measure would cost $1.2 trillion over the next ten years.

* Expanding the corporate tax provisions of the TCJA: Trump wants to restore more generous tax benefits for companies, including deductions for research and development costs. This would cost an estimated $623 billion over the next ten years.

* Reduction of the corporate tax rate: Trump has indicated that he wants to cut the corporate tax rate from the current 21%, and has raised the possibility that it could fall to as low as 15%. A cut to that level would cost $595 billion over a decade.

Penn Wharton analysts did not evaluate Trump’s proposal to eliminate taxes on tips because it involves too many unknowns at this point. “The cost to the 10-year budget could vary significantly depending on whether current sources of income can be reclassified as ‘tips’ for the mutual benefit of employers and employees,” the analysts wrote. “The ability to reclassify income is often an important source of revenue response in traditional tax assessment, so a significant amount of additional detail would be required to evaluate this provision.”

However, the analysts did give a sense of who would benefit from Trump’s tax and spending proposals. While every income group would benefit, some would benefit more than others. The biggest winners would be the super-rich: The top 1% would take home an extra $47,515 by 2034, while the top 0.1% would gain $214,935. The bottom 20% of the income distribution, on the other hand, would earn an extra $465.

Quotes of the day

“There is no doubt that Vice President Harris is more fiscally disciplined than President Trump.”

− Mark Zandi, chief economist at Moody’s Analytics, says

NBC News that the Harris camp is turning the traditional script of partisan demands for fiscal responsibility on its head.

NBC’s Sahil Kapur writes: “Harris proposes spending about $2 trillion and raising $5 trillion in tax revenue over a decade. Trump is calling for about $5 trillion in tax cuts and spending while raising less than $3 trillion in revenue from tariffs,” according to bipartisan estimates. And the Harris camp is calling Trump’s agenda an “inflation and deficit bomb.”

“This is a clear signal that whatever policies they pursue, they intend to have fiscal discipline,” Zandi told NBC News. “And that’s a bit of a dig. Historically, fiscal discipline and focusing on budget deficits has been a Republican rallying cry.”

Neither campaign has presented a fully detailed budget plan, and Trump has not yet outlined any real reduction in the budget deficit. While he has said he will finance his plans through stronger growth, budget experts scoff at the idea that tax cuts can be financed through a budget deficit. Campaign spokeswoman Karoline Leavitt told NBC News that Trump will cut wasteful spending and increase energy exports. “America faces an inflationary spending problem, not a revenue problem,” she said.

“The parties are further apart than ever before, at least in my memory, and I’m quite old. The Democrats have moved to the left and the Republicans to the right.”

− Isabel V. Sawhill, 87, senior fellow emerita for economic studies at the centrist Brookings Institution, in a New York Times article detailing the starkly different anti-poverty policies of Vice President Kamala Harris and former President Donald Trump.

Times poverty reporter Jason DeParle writes that the current presidential campaign “represents the sharpest conflict in anti-poverty policy in at least a generation, and its outcome could affect the economic security of millions of low-income Americans.” He writes that Harris will seek to continue or expand many pandemic-era programs that have helped temporarily halve the poverty rate, “including subsidies for food, health care and housing, and revive a change to the child tax credit that essentially created a guaranteed income for families with children.”

Republicans say Biden’s policies have fueled inflation and reduced work motivation. Trump, on the other hand, has promised to extend his 2017 tax cuts and has otherwise said little about helping the poor. “Trump’s anti-poverty plans are otherwise vague,” DeParle writes, “but his record is marked by hostility toward the programs Harris would defend or expand. He tried to take millions of people off Medicaid and food stamps, many of them low-wage workers. He tried to reduce the number of people in public housing and raise their rents.”

Read more at the Times to differences in health care, housing, nutrition and taxes.

Health experts fear Kennedy’s role under Trump

Donald Trump is reportedly close to appointing Robert F. Kennedy Jr. and former Democratic Representative Tulsi Gabbard as honorary chairs of a presidential transition team. Kennedy’s appointment in particular has raised concerns among public health leaders, who fear the anti-vaccination campaigner and conspiracy theorist could be put in a position to help select the next directors of the Centers for Disease Control and Prevention, the Food and Drug Administration and the National Institutes of Health.

“If he comes into administration and appoints people who think like he does, it will do tremendous damage to the public health of this country,” said Dr. Ashish K. Jha, dean of the Brown University School of Public Health and former White House Covid-19 response coordinator.
The New York Times.

And Dr. Gavin Yamey, director of the Center for Policy Impact in Global Health at Duke University, told the Times’ Christina Jewett: “It’s terrifying to think that RFK Jr. could rise to that level of power and political influence,” he said. “He’s an extreme anti-vaxxer and conspiracy theorist with fringe views that are far outside the mainstream.”

Times reporter Rebecca Davis O’Brien
Notes several Kennedy supporters told her they hoped Trump would give him the power to dismantle what they see as a corrupt and dangerous federal bureaucracy. Trump’s running mate, Senator JD Vance, told reporters on Tuesday he would like to see Kennedy in a possible second Trump administration, but did not say how. “He’s asking important questions about why Americans are doing so badly,” Vance said.