Kamala Harris and Donald Trump have a totally unserious plan about pledging
fiscal prudence.
There are many fiscal deficits and debts, but Harris and Trump's plan doesn't fix
them. Estimation says that Harris would be more fiscally responsible than
Trump. According to the Penn Wharton Budget Model’s calculations, Trump
deficit would be 5 times more important than Harris over the next decade.
Despite this, both would increase America’s fiscal problems.
Currently, deficit projection is about 6% of the GDP per year, and Trump would
push it to almost 8%, against 7 for Harris. She wants to increase income taxes
for Americans who earns more than 400 000 dollars a year, but she will have to
restore most of Trump’s 2017 tax cuts.
We don’t know yet what she’ll end up doing, but, according to the explanation
of Kent Smetters, director of PWBM, we can only pay attention to what she has
said as a part of her real plan.
On his side, Trump would like to reduce the corporate-income taxes to 15%, but
recently he said that 20% would be better. His main problem now, in how
expensive his projects are, is to calculate how his tariffs would be in real. He has
talked about importation taxes, that could generate 2.8trn dollar over the next
decade. But they don’t know yet how other countries will respond, and the
results could be smaller than he hopes.
Several conclusions are possible. First, Harris speech about reducing the deficit
isn’t clear. Trump’s one is clearer, but also really expensive.
Finally, budget policy will depend on who is elected. If it’s Trump, there will be
reducing taxes and introducing tariffs. On the contrary, if it’s Harris, she’ll make
taxes increase for the rich population to transfer the money to the poor one.
The only thing we know is that both of these approaches will increase the
deficit and that American has two options to choose from which, like the article
says, “prudence doesn’t feature in either of them”.
