Trump would add twice as much to national debt as Harris, study finds

Trump says major new tariffs on imports would bring in enough revenue to offset all the tax cuts, but the study doesn’t support that claim, and many economists say the tariffs would also drive prices up for U.S. consumers.

All told, CRFB found that the Trump policies it studied would add $7.5 trillion of debt — more than twice as much as the Harris proposals the group scrutinized.

Harris would add $3 trillion to the debt by extending the 2017 tax cuts for those earning less than $400,000 a year, and $1.35 trillion through a major expansion of the child tax credit and the earned income tax credit, according to the study. Harris’s campaign says those programs would cost far less.

Harris has also called for ending income taxes on tips, but her campaign has discussed maintaining payroll tax requirements and adding guardrails that restrict what kind of workers could be eligible. That would cost $200 billion, according to the study.

“Despite the fact that our fiscal situation is really unhealthy, we have two candidates whose proposals, if looked at comprehensively, would make the situation worse rather than better, with a noticeable distinction that former president Trump would make it significantly worse,” CRFB President Maya MacGuineas told The Washington Post.

Many of the candidates’ plans to both spend and raise money are hypothetical and would require approval from a deeply divided Congress. But taxes, debt and fiscal policy will define much of Harris’s or Trump’s presidency — and dominate political battles in Washington next year.

Major portions of Trump’s 2017 tax cut expire in 2025, and without new legislation, individual tax rates will increase sharply. Congress’s nonpartisan bookkeeper projects the nation’s debt-to-GDP ratio, a key metric of financial health, will reach a new all-time high within the next decade, imperiling financial stability. And Social Security and Medicare will also be insolvent by 2035 and 2036, respectively, forcing mandatory benefits cuts by those dates without congressional action.

“If we don’t take this seriously, it sort of becomes like bankruptcy, which happens very slowly and then suddenly, all at once,” said Jason Fichtner, chief economist at the Bipartisan Policy Center think tank. “What that means for individuals, households, consumers, investors, borrowers, is that they will see the value of the dollar decline. They’ll probably see interest rates go up and they will see inflation go up, as well. Does that mean an apocalypse and there’s nothing to buy anymore? No. It means things become more expensive and we have a hard time funding the things you want to pay for now, like roads, bridges and education.”

Both candidates do have plans to raise some federal revenue: The tariffs Trump has proposed would reach as high as 20 percent on all $3 trillion of annual imports, which could bring in $2.7 trillion in revenue, according to CRFB.

But, by some of his own economic advisers’ analysis, the tariffs could also dramatically increase prices and depress U.S. economic output, because producers often pass on the cost of import duties to consumers. Lower economic output might also mean lower tax revenue.

“Tariffs are just a tax, no question about it,” Stephen Moore, an economist at the right-wing Heritage Foundation and a Trump economic adviser, told policymakers at an event hosted by Politico this spring. “I don’t always agree on everything with Donald Trump. He knows I don’t agree with the monetary policy. A tariff is just a consumption tax.”

Trump would also dramatically expand domestic energy production and recoup funding from some of President Joe Biden’s climate investments, worth up to $700 billion. And Trump has pledged to end the Department of Education at a savings of $200 billion, though much of that money would probably have to be reprogrammed into state education grants.

Trump’s campaign did not respond to a request for comment.

A Harris spokesperson disagreed with the fiscal analysis of the Democrat’s proposals and said that as president, Harris would commit to reducing the budget deficit.

“Many of the things were assumptions, not things she’s proposed,” said a Harris economic adviser, who spoke on the condition of anonymity because they were not authorized to speak publicly about the report. “And the cost of keeping the pledge [not to raise taxes on those making less than $400,000] is unknown, and in negotiations and could be significantly less.”

Harris has said she would pay for each of her policy proposals, and under one budget model CRFB studied, her plans would not raise the debt at all.

Under the most realistic scenario CRFB studied, Harris would raise $900 billion in revenue by increasing the corporate tax rate from 21 percent to 28 percent, plus another $900 billion from additional tax revenue. Much of that would be generated from new funding for the IRS to investigate tax cheats.

Harris has not yet proposed new tax rates for those earning more than $400,000, but less than roughly $600,000. Rates for that tax bracket would be worked out in negotiations with Congress, she has said. Rates for the wealthiest earners would be set at 39.6 percent, according to Harris’s plan.

The vice president would also increase tax rates on capital income, including on gains, dividends and corporate stock buybacks, for $850 billion in revenue, and allow Medicare to more aggressively negotiate prescription drug prices, worth $250 billion in debt reduction.