Debt Projections Analysis

In a revealing analysis by the non-partisan Committee for a Responsible Federal Budget (CRFB), it has been disclosed that Donald Trump's campaign proposals could surge the national debt by an extraordinary $7.5 trillion—more than double what Kamala Harris's plans would contribute, which stands at $3.5 trillion.

Current State of US National Debt

This staggering increase comes at a time when America's national debt has ballooned to $35.6 trillion, raising alarms about the sustainability of such fiscal policies. The analysis highlights that both candidates are set to add trillions in debt if elected, yet neither appears willing to tackle the urgent issue of mounting national liabilities.

Tax Plans: Trump vs. Harris

Both Trump and Harris have expressed support for extending significant tax cuts from Trump’s first term, which are anticipated to expire in 2025. Trump's promise includes extending these cuts fully and introducing further reductions aimed at eliminating taxes on overtime, Social Security, and tips.

Additionally, he proposes an ultra-low corporate tax rate of 15% for domestic manufacturers, funded by imposing hefty tariffs on imported goods, potentially raising $2.7 trillion, according to the CRFB.

On the other hand, Harris aims to roll back tax cuts for the wealthy, raising the corporate tax rate from 21% to 28%. Interestingly, she too supports maintaining tax cuts for individuals earning under $400,000 annually, including the elimination of taxes on tips.

Harris has also laid out various tax relief proposals aimed at families with children and start-ups, in addition to advocating for substantial subsidies in childcare and healthcare costing hundreds of billions.

Congressional Challenges

The hurdles for either candidate's proposals are significant, as any new tax or spending measures would ultimately require approval from Congress, which remains a divided entity.

“Tax cuts are always popular during an election cycle, but passing these proposals through Congress is another challenge altogether,” says Jimmy Lee, CEO of Wealth Consulting Group. He noted a concerning lack of awareness among investors regarding the potential dangers of rising debt levels.

Current Borrowing Costs and Economic Projections

Currently, the U.S. enjoys relatively low borrowing costs due to strong private investor demand for its debt. However, analysts caution that rising borrowing costs could loom in the future.

The current debt-to-GDP ratio stands at around 120%, one of the highest among major economies globally. For perspective, Italy's is 144%, Spain's is 110%, and Germany’s sits at 67%, highlighting a concerning trend that could impact the nation’s economic stability.

Conclusion and Future Implications

As both candidates sharpen their platforms leading up to the November elections, the implications of their fiscal policies warrant serious consideration, not only for the immediate financial landscape but also for future generations who may bear the weight of ballooning debt.