Vice President and Democratic presidential candidate Kamala Harris (R) shakes hands with former president and Republican presidential candidate Donald Trump during a presidential debate in September.
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With less than a month until Election Day, the Harris and Trump campaigns have presented their economic vision to the American people — including proposed tax cuts, border security spending, and affordable housing policies. But it is still unclear how much the plan will cost, and how it will be paid for.
A new report from a nonpartisan The nonprofit Committee for a Responsible Federal Budget found that former President Donald Trump and Vice President Harris would increase the national debt to pay for the initiative. Trump’s economic plan is estimated to sink the country $7.5 trillion more in debt over the next decade, while Harris’ proposals will cost the government half as much – about $3.5 trillion.
“Whoever wins the 2024 presidential election will face an unprecedented fiscal situation when he takes office,” he said. Report of the Committee on Federal Budget Responsibility. “Republican and Democratic presidential candidates have implemented their campaign plans at best, maintaining the status quo and, at worst, increasing the debt and deficit.”
The report said the estimates came with “high uncertainty” due to the lack of specifics from the campaign; Estimates for Harris’ plans range from adding $0 to $8.1 trillion for the debt, while forecasts for Trump range from $1.5 trillion to $15.2 trillion.
The committee warned of an “ultimate fiscal crisis” if politicians do not address the issue national debt is stronger. The non-profit organization also provides a summary of the candidates‘ competing economic visions – drawn from campaign websites, emails, speeches, social media posts and discussions with campaign staff.
Beyond the Trump Tax Code
Harris and Trump plan to extend parts of the Tax Cuts and Jobs Act (TCJA) – legislation passed in 2017 that made major changes to tax code. The law will expire in 2025.
Passing the TCJA is the costliest part of both campaigns’ economic plans, totaling $3 trillion for Harris and $5.4 trillion for Trump, according to the report.
The difference between the two bills comes from Harris’ promise that “no one making less than $400,000 a year will pay more in taxes,” meaning that Americans who make less than that will continue to benefit from the TCJA’s tax cuts while those who make more than that will not.
Meanwhile, Trump promised to “make the Trump tax cuts permanent” for everyone who would benefit from the law. In particular, Trump has promised to end the $10,000 cap on deductionsr state and local taxes, known as SALT, which have become a contentious political issue.
Taxes on tips, overtime and Social Security
The Harris and Trump campaigns have promised to eliminate the tax on tips — even as economic heads shake.
Trump proposed the first policy after a visit to Las Vegas. But the Harris campaign told NPR that the plan is different because the policy would have a salary cap, to prevent high earners from marking their entire salary as wages and taking “the benefit of the policy.” The Harris campaign also said it plans to increase the minimum wage in tandem with tips not taxing.
The Committee on a Responsible Federal Budget estimates Harris’ tax-free tips policy would cost $200 billion over 10 years, while Trump’s would cost $300 billion.
The former president also proposed a blanket tax exemption for overtime pay. The committee listed this as the second most expensive part of the economic vision, costing the US government about $2 trillion over 10 years in lost taxes.
Trump’s call to end taxes on Social Security benefits is the third most expensive part of the plan. Between 50% and 85% of Social Security benefits are taxed, the committee said. Cutting those funds would increase the deficit by $1.3 trillion, it found.
Harris has no plans to cut taxes on overtime pay or Social Security benefits, according to the report.
Child Tax Credit
The second most expensive part of Harris’s economic plan is the proposed expansion of the Child Tax Credit, which currently gives each parent a tax credit of $2,000 per child.
As president, Harris “will make the CTC fully refundable; expand eligibility to 17-year-olds; and increase the CTC to $6,000 for newborns, $3,600 for children under six, and $3,000 for children under six and more,” the report said.
This CTC expansion will cost $1.4 trillion over ten years.
While Trump’s mate, Senator JD Vance of Ohio, said he supported the increase in the child tax credit, the Committee for a Responsible Federal Budget was not included in the analysis.
spending the border
Both Harris and Trump have pledged to increase border security.
The Democratic presidential candidate says he will sign a bipartisan border security bill if it passes — one that would hire border patrol agents, asylum officers, immigration judges, and more. The bill failed to pass a divided Congress earlier this year, and would have cost $100 billion over ten years.
On border security, Trump said he would implement “the largest deportation program in American history,” while also completing a border wall and strengthening the Immigration and Customs Enforcement agency..
The committee estimated Trump’s immigration plan would cost $350 billion over 10 years, but also noted uncertainty, given few details on Trump’s mass deportation plan.
Affordable housing program
Both Harris and Trump plan to tackle high housing costs, but their methods differ.
Harris plans to give first time home buyers a tax credit and will seek to boost it housing construction through tax incentives for new homes, while also developing low-income housing tax credits.
The plan has a price tag of $250 billion, according to the committee.
Meanwhile, Trump plans to rely solely on tax incentives to help homeowners. The campaign has not released details on exactly how.
“While the Trump campaign has not provided specifics on the tax credit, one option is to revive the $8,000 first home buyer tax credit that took effect in 2009 and 2010,” the committee report said.
With this assumption, the committee predicts that Trump’s housing plan will cost $150 billion over the next decade.
Health care proposals
Harris’ planned expansion of Affordable Care Act subsidies is estimated to cost $550 billion over 10 years. The ACA allows Americans without employer-provided or government-sponsored health insurance to qualify for income-based tax credit subsidies, reducing the overall cost of obtaining coverage.
Harris plans to increase the subsidy permanently, according to the deficit analysis.
Meanwhile, Trump promised that his administration would pay the government or insurance companies for in vitro fertilization treatment and “we will also allow new parents to deduct the cost of large babies from their taxes,” Trump said this summer.
The group said it did not receive specifics from the Trump campaign; based on public statements, it is estimated that this plan will cost $150 billion over a decade.
Revenue: taxes versus tariffs
Harris and Trump want to offset the huge costs of the plan by making government money elsewhere.
Harris intended to generate revenue through taxes on companies and high-earners: those who make more than $400,000 per year. The act would raise $4.3 trillion, according to the Committee for a Responsible Federal Budget. The Harris White House will bring back $250 billion to reduce prescription drug spending, that’s about it.
Trump, on the other hand, wants to raise revenue with heavy tariffs on foreign imports and with the reduction of policies to protect the environment, which is expected to allow oil companies to drill in protected land and generate tax revenue. The committee said the plan would generate $3.7 trillion over 10 years.
Neither Harris nor Trump’s revenue plans would cover the projected costs, the group found.
