Under Barack Obama, America’s national debt exploded, increasing from about $10 trillion to just under $20 trillion. Under President Trump’s first term, it also went up – most of the increase coming during the COVID pandemic. Under Joe Biden and Kamala Harris, it’s exploded by almost $8 trillion.
That’s mostly from the profligate spending found in the misnamed “Inflation Reduction Act” and their massive scheme to make taxpayers pay for loans students took out and spent. It most recently passed the $35 trillion mark.
Now a report from the Washington Examiner explains President Donald Trump’s planned economic agenda, if he’s elected, would slow down the borrowing and increase it by only about $4 trillion over the next decade.
Of course, without his plan, American taxpayers will be on the hook for that $4 trillion over that time period.
“Trump’s plans for tax cuts would see revenues fall by $5.8 trillion over the next decade, according to the estimate from the Penn-Wharton Budget Model, a group housed at the University of Pennsylvania’s business school that analyzes the fiscal effects of public policies. Under current law, the government is supposed to take in about $63 trillion in revenues, according to congressional projections,” the report said.
Allowing for economic growth, that would make the deficits, actually, only $4.1 trillion.
It’s because Trump would want to extend expiring individual and business rate cuts from his 2017 law, eliminate taxes on Social Security benefits and cutting the corporate tax rate from 21% to 15%.
Many people think taxing corporations is an easy way to generate government revenue, but actually those taxes paid by companies actually are funded by the company’s stockholders or customers or both.
“Permanently extending the expiring individual income tax provisions of TCJA would add $3.4 trillion to deficits (before interest costs) over the next ten years,” the report said. “Restoring the original TCJA regime for taxing business investment adds another $623 billion to increase the total cost of TCJA extension to more than $4 trillion.”
Canceling taxes on Social Security has just been “floated” for now. Seniors pay income taxes on half their benefits, or 85% depending on their income.
That would raise the deficit another $1.2 trillion over the decade, while lowering the corporate tax rate would cost $595 billion.
“Low, middle, and high-income households in 2026 and 2034 all fare better under the campaign proposals on a conventional basis,” the report confirmed. “These conventional gains and losses do not include the additional debt burden on future generations who must finance almost the entirety of the tax decreases.”
The report warned that “a large chunk” of middle-class voters would be hit with a huge tax hike if Trump’s rates are not extended under a Kamala Harris administration.
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