The Trump campaign’s tax-and-spending plans would increase deficits by more than $4 trillion in the next 10 years, according to a prominent analysis.
The Penn Wharton Budget Model formed its estimate by looking at three key proposals, including a push to extend the expiring parts of Mr. Trump’s 2017 tax overhaul, a reduction of the corporate tax rate from 21% to 15%, and the elimination of income taxes on Social Security benefits.
Analysts said Mr. Trump’s plans would increase deficits by $5.8 trillion on a conventional basis, but closer to $4 trillion once policy results, or “economic feedback effects,” are taken into account.
Penn Wharton said a permanent extension of personal income tax provisions in the 2017 Tax Cuts and Jobs Act (TCJA) accounts for the biggest chunk of the deficit estimate, adding $3.6 trillion. Restoring the law’s system for taxing business investment adds another $623 billion.
A separate analysis from Penn Wharton found that Vice President Kamala Harris’ plans, which build off of President Biden’s fiscal 2025 budget and include new subsidies for homeownership, would increase spending by $2.3 trillion over 10 years while raising revenue by $1.1 trillion.
The difference results in an increase to primary deficits of $1.2 trillion, or an increase of $2 trillion once negative economic effects are factored in, the analysts said.
Mr. Trump’s team responded to a request for comment on the Penn Wharton report by contrasting high spending and inflation under “Kamalanomics” with his plans.
“President Trump will destroy inflation and rapidly bring down costs by unleashing American energy production, reining in federal spending, and expanding the aggressive deregulation program he successfully carried out in his first term to bring down interest rates, shrink deficits, and lower long-term debt levels,” Republican National Committee spokeswoman Anna Kelly said.
For years, Democrats railed against the GOP’s tax overhaul as a law that increased deficits while mainly benefiting the wealthy and corporations. They said Mr. Trump’s debt-raising policies belied years of conservative complaints about the growing national debt and its impact on future generations.
Mr. Trump and GOP allies said the tax overhaul supercharged the economy and lifted the fortunes of many Americans before the COVID-19 pandemic upended society. Conservatives say pro-growth tax policies and reductions in government spending will lift Americans into prosperity.
The Penn Wharton model estimated that eliminating taxes on Social Security benefits, a key Trump talking point to gain seniors’ votes, would cost $1.2 trillion over 10 years.
Slashing the corporate tax rate to rate to 15% would tack on another $595 billion over 10 years, analysts said.
There are some big gaps in Penn Wharton’s analysis. It does not include a major Trump proposal to slap a 10% on all imports and much higher targeted tariffs, since major implementation details are missing and the trickle-down impacts could be myriad.
“While new import taxes and tariffs could raise several trillion dollars in new revenue over the next decade, they could also lead to revenue losses due to potential retaliatory actions from other governments and other economic dynamics,” the analysts said.
Also, the estimate does not include a Trump proposal to eradicate taxes on tipped wages. Analysts said plan details would need to be ironed out to produce a reliable estimate.
Mr. Trump has made the idea a key selling point of his campaign. It is aimed in part at voters in swing-state Nevada, who rely heavily on tips.
Ms. Harris has backed the idea, too, prompting Mr. Trump to call her a copycat.
The vice president hasn’t detailed much of a policy agenda during her unusually fast sprint to Election Day since President Biden dropped out of the race in July. But she has floated some plans and embraced proposals from her work alongside Mr. Biden.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.