WASHINGTON — Kamala Harris is backing trillions of dollars in new tax revenue to fund her new policy plans, and her campaign is attacking Donald Trump for failing to explain how he would pay for the multitrillion-dollar agenda he is campaigning on.
Harris campaign spokesman James Singer called Trump’s agenda “an inflation and deficit bomb” in a statement to KeynoteUSA, prompting a response from the Trump campaign blaming her for a “Biden-Harris inflation tax.”
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According to nonpartisan estimates, Harris proposes spending about $2 trillion and raising $5 trillion in tax revenue over a decade. Trump proposes about $5 trillion in tax breaks and spending, while raising less than $3 trillion in revenue through tariffs.
“Vice President Harris is certainly being much more fiscally disciplined than President Trump,” said Mark Zandi, chief economist at Moody’s Analytics.
“It’s a clear signal that regardless of policies, they plan to be fiscally disciplined,” he said. “And that’s a little bit different. Historically, being fiscally disciplined and focusing on budget deficits has been a Republican campaign slogan.”
A Harris campaign spokesperson said she supports the $5 trillion in new tax revenue coming to the White House. budget released in March, including raising the corporate tax rate from 21% to 28%, ending Trump’s tax cuts for top earners next year and a series of taxes on the wealthiest Americans.
Harris’ plans to cut housing, child care and prescription drug prices would cost about $1.7 trillion, according to the Committee for a Responsible Federal Budget, a research group that calls for reducing red ink.
Zandi agreed with that estimate, saying Harris’ new plans would total $1.5 trillion and top out at $2 trillion, before offsets.
“At the very least, it should reduce the deficit by about $3 trillion over the 10-year budget horizon,” he said. “I can’t recall any deficit reduction package that comes even close to that.”
Harris is seeking to flip the script on fiscal responsibility and create a enabling structure for moderate Republicans and center-right voters skeptical of Trump to support her candidacy, particularly in key swing states. She has rejected some left-wing proposals she supported in 2019 as a presidential candidate, such as Medicare for All and a Green New Deal.
Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, warned that Harris’ campaign has not earmarked $3 trillion for deficit reduction.
“They have also indicated that they will have plans around child care, long-term care and paid leave,” she said.
And, he noted, extending Trump’s tax cuts for lower-income earners into 2025 would also hurt their revenue.
“We haven’t seen the full plan yet,” he said.
Trump claims ‘tremendous growth’ would finance his costly policies
Meanwhile, Trump and his campaign have called for extending his 2017 tax cuts, as well as eliminating Social Security payroll taxes, eliminating tip taxes and increasing the child tax credit to $5,000.
Together, their plans would cost about $5 trillion, Zandi said.
Asked in Las Vegas on Friday how he would fund his plans, Trump told reporters: “Growth. We’re going to have tremendous growth. We’re going to have tremendous growth.”
Goldwein said that is not a serious proposal.
“Tremendous growth sounds like a great idea! I don’t know why we didn’t do it in all the previous administrations,” he said. “But no, you can’t grow your way out of this.”
Trump’s big proposal to raise government revenue is the imposition of new taxes on imported goods: a 10% worldwide tariff and a 60% tariff on Chinese imports. Zandi projected that this would generate as much as $2.5 trillion in revenue. The Tax Policy Center My dear that Trump’s tariffs would generate $2.8 trillion in revenue, reducing U.S. imports by 15%.
Goldwein added that Trump’s tariffs and mass deportation policies could reduce growth, even though some of his tax break proposals are good for economic growth.
“As a starting point, if you look at their agenda as a whole, the direction is not even clear. It could be pro-growth or anti-growth,” he said. “But the magnitude will definitely not be such that it is so pro-growth that it covers trillions and trillions of dollars of additional borrowing.”
Regardless of who wins the election, Congress is headed for a major tax debate next year, as much of Trump’s 2017 tax cuts are set to expire at the end of 2025. It’s unclear which parts will be extended.
Harris campaign calls Trump’s plans ‘inflation and deficit bomb’
Singer predicted that the higher deficits under Trump’s plans would ultimately be covered by ordinary Americans.
“Donald Trump won’t pay for her agenda, but the middle class will — with higher costs, cuts to Social Security and Medicare, and less economic opportunity,” Singer said in an email. In contrast, he said, Harris “will force billionaires and big corporations to pay their fair share while she builds the middle class.”
In response, Trump campaign spokeswoman Karoline Leavitt accused the Biden-Harris administration of engaging in “reckless spending” and said, “America faces an inflationary spending problem, not a revenue problem.” She said Trump would seek to boost U.S. economic growth. oil production and exports, even when they have reached All-time highs under the Biden administration.
“President Trump will cut wasteful government spending and turn America back into a net energy exporter… to help balance our nation’s budget and pay down our growing debts,” Leavitt said.
Trump has also been looking at further tax cuts for individuals and businesses next year, which would boost his estimates of the red.
Zandi said Trump’s 2017 tax cut “lifted growth in terms of corporate investment” but “was nowhere near paying for itself,” and that extending it would add further red ink.
“There’s no way you can achieve that kind of growth,” he said. “Deficit-financed tax cuts just don’t pay for themselves.”
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