Chethma De Mel, Jadetimes Staff
C. J. De Mel is a Jadetimes news reporter covering Entertainment News
According to an analysis by the non-partisan Committee for a Responsible Federal Budget, campaign proposals by both Donald Trump and Kamala Harris would cause the U.S. national debt to significantly increase-over twice as much from the former as from the latter. CRFB projects that Trump's proposals would add $7.5 trillion to the national debt, while Harris' would add $3.5 trillion.
A think tank cautioned that neither of the political camps appears willing to take on the growing federal debt, standing at $35.6 trillion. Both candidates have expressed support for extending the largest tax cuts of Trump's first term-the greatest contributor to the expected surge in debt.
With parts of Trump's tax plan set to expire in 2025, the issue is poised to be a big point of contention in the election. Trump has promised to extend the tax cuts in their entirety and also has pressed for further cuts. His proposals include eliminating taxes on overtime, Social Security, and tips income, and creating a reduced corporate tax rate of 15% for domestic manufacturers. He also plans to make another $2.7 trillion from rampant tariffs on goods coming into the country.
Meanwhile, Harris has supported rolling back tax cuts for the wealthy and increasing the corporate tax rate from 21% back up to 28%. But she would keep tax cuts for individuals making less than $400,000 and has backed Trump's idea to eliminate taxes on tips. Harris has also suggested several narrower tax cuts aimed at families with kids and startups as well as initiatives for major new spending for child care and health care subsidies.
Both of these candidates' plans would need to be approved by Congress, and it is anybody's guess how much of their respective plans would make it through the largely divided legislative body. As Jimmy Lee, Wealth Consulting Group's chief executive has observed, tax cuts are usually easier to sell politically than tax increases, but the devil will be in getting it through Congress.
While the U.S. has benefited from a low cost of borrowing through all-time investor demand for its debt, analysts warn that may get expensive in the future because of growing national debt. With the country's debt-to-GDP already at 120%, one of the highest among major global economies, the U.S. is vulnerable to rising financial risks. By comparison, Italy's ratio stands at 144%, Spain at 110%, the U.K. at 101%, while Germany is at 67%.
