SWIMMING IN RED INK: Outside analyses have found that both Vice President Kamala Harris and former President Donald Trump are offering more ice cream than broccoli with their fiscal plans. But it’s also true that scorekeepers have projected that Trump’s proposals would add far more to the federal debt than Harris' — which is what the deficit hawks at the Committee for a Responsible Federal Budget estimate as well. CRFB is out with a new analysis this morning that found the middle-ground projections for Harris’ fiscal proposals would add $3 trillion to deficits over a decade, while Trump’s would pour on another $7.5 trillion in red ink. The group said that it tried to provide estimates for all of the candidates’ various policy ideas, unlike some of the other analyses out there. But that also underscored the challenges that these outside scorekeepers are facing in this campaign, given that neither candidate has exactly fleshed out all their fiscal policy ideas. MORE ON THIS IN A BIT, but thanks for joining us for Weekly Tax. May your weekend have been as eventful as the Vanderbilt goalpost. Speaking of winning: Today marks 39 years since Lynette Woodard, who had recently captained a gold medal-winning U.S. Olympic basketball team, became the first female player for the Harlem Globetrotters. Don’t play any tricks. Send us your best tips and feedback. Email: bbecker@politico.com, bfaler@politico.com, bguggenheim@politico.com and teckert@politico.com. You can also reach us on X at @berniebecker3, @Brian_Faler, @ben_guggenheim, @tobyeckert, @POLITICOPro and @Morning_Tax. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories. ABOUT THAT RED INK: The uncertainty about what, exactly, the candidates are proposing led to CRFB finding a wide range of potential deficit impacts. Harris’ plan could, in fact, add no extra debt, or as much as $8.1 trillion. For Trump, the low end lands at $1.45 trillion and the high end at $15.15 trillion. This might be self-evident based on all those top-line numbers, and perhaps from where the two parties are on tax matters these days. But from a pure tax perspective, CRFB found both that Trump was offering more in tax cuts and less in revenue-raisers than Harris. But at least on the revenue-raising side, the difference might not be as much as you think. CRFB projects that Harris would find about $4 trillion in added collections, through proposals like a higher corporate rate, more robust taxes on capital gains and ratcheting up international tax rules. Still, it’s not like Trump has nothing when it comes to stacking up more revenues — some $2.7 trillion from increased tariffs, as CRFB found, along with more from reversing some of the energy incentives from the Democrats’ 2022 tax-and-climate law. The tax cut side is a different story. CRFB has Harris in the neighborhood of $5 trillion in proposed tax relief, the bulk of which comes from seeking to extend the parts of the Trump tax cuts that expire at the end of next year for those making under $400,000 a year. (Expanding the Child Tax Credit and Earned Income Tax Credit, while extending Obamacare tax credits that help people purchase insurance, make up almost all of the rest.) Meanwhile, Trump’s plans for extending all the temporary parts of the Tax Cuts and Jobs Act could add more than $5 trillion to deficits on their own, particularly if you read the former president as wanting to fully scrap the $10,000 limits on state and local deductions that he signed into law with TCJA. Then add another more than $3 trillion on top of that, with Trump’s various targeted tax relief ideas for tips, overtime pay and Social Security benefits, among other things. Underscoring the challenge that these kinds of projections face: It’s not just that the candidates have been vague about their tax proposals, with Trump rolling out ideas like “get SALT back,” or the fact that there are a wide variety of ways that the government could scrap taxes on overtime or tips. (Or even that it’s far easier said than done to project what a TCJA extension for those under $400,000 would look like.) At least on the Republican side, congressional allies of Trump have already tried to shape some of his less defined tax proposals, like SALT, something that’s not really within the scope of these analyses. For instance, Ways and Means Chair Jason Smith (R-Mo.) stressed last week that he didn’t think a Republican-led House would fully repeal the SALT cap, perhaps no surprise given that the $10,000 limits are a big issue in but a small fraction of GOP-held districts. Still, Smith also acknowledged that Republicans would likely have to offer some SALT relief if they have control next year, underscoring that Trump still has some sway on these matters. Semi-related point: An interesting question posed on social media, by The Wall Street Journal’s Richard Rubin — why does President Joe Biden’s Treasury Department project that raising the corporate tax rate from 21 percent to 28 percent would raise so much more than JCT? (The former says about $1.35 trillion over a decade, the latter short of $900 billion.) THE CAMPAIGN TRAIL: With less than a month until Election Day, both campaigns have started to lean more into their tax messages in campaign ads, with Harris and allies talking up their tax-the-rich populism. Trump, meanwhile, is out with a new spot that argues that Harris is interested in raising taxes on far more than just the rich and corporations. Conservative groups — and the Trump team, for that matter — have wondered why Harris hasn’t gotten more scrutiny for her 2020 presidential campaign, where she promised a full repeal of the Trump tax cuts. But Harris’ economic platform, released last month, did stress that she would continue Biden’s $400,000 promise, and both The New York Times and The Washington Post found that Trump’s newest tax advertisement is plenty misleading. For instance, Trump’s spot cites only half of a sentence from the NYT, “Harris is seeking to significantly raise taxes,” while leaving out the last half — “on the wealthiest Americans and large corporations.” The Trump ad also asserts that Harris wants to raise taxes by close to $3,000 on families, citing figures from the Tax Foundation. But as The Washington Post noted, those Tax Foundation numbers are on the costs of letting all the temporary parts of TCJA sunset — something that would be difficult to call Harris’ current plan.
| 
No comments:
Post a Comment