Trump: $4 ($5.6) trillion increase in cumulative deficit, minus tariff revenue increase. Harris: $1.7 trillion. On the tariff impact, you have to ask: “do you feel lucky?”

For Trump, extending the 2017 TCJA provisions would at $4 trillions over ten year. Some of that might be made up with tariffs (at most $225 bn/yr, assuming no feedback to quantities, and  aggregate GDP (pretty unlikely). For Harris, housing credits and expansion of the Child Tax Credit, Earned Income Tax Credit, and health care subsidies would increase the ten year budget deficit by $1.7 billion. Exempting tips from taxation would have impacts of $150-$250 billion/yr, with a big upside risk, in the Trump proposal, and $100-$200 billion in the Harris proposal.

Add $1.6 trillion over ten years if Social Security payments are exempted from taxation (Tax Foundation)

[corrections to some figures, to read trillions – MDC]

Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.

Leave a Reply