An analysis projects that former President Trump’s proposed spending and tax reforms could increase the national deficit by over $4 trillion over the next decade. The Penn Wharton Budget Model’s recent report evaluates various economic proposals from Trump’s campaign, including extending provisions from his 2017 tax overhaul, eliminating taxes on Social Security benefits, and lowering the corporate tax rate.
The report estimates that these measures could add $5.8 trillion to primary deficits between 2025 and 2034 on a conventional basis. When factoring in “economic feedback effects,” this amount is adjusted to $4.1 trillion.
Harris’s economic proposals could increase the deficit by $1.2 trillion, contrasting with Trump’s $4.1 trillion projection
The extension of individual income tax cuts from Trump’s 2017 Tax Cuts and Jobs Act (TCJA) represents the most noticeable expense, potentially increasing deficits by $3.4 trillion over ten years, excluding interest. Additionally, reverting business investment taxation to TCJA’s original terms could add another $623 billion, pushing the total cost of extending TCJA to over $4 trillion.
The elimination of taxes on Social Security benefits is projected to cost up to $1.2 trillion while reducing the corporate tax rate to 15% could result in a $595 billion expense. On a conventional basis, Trump’s proposals could benefit households across all income levels in 2026 and 2034. However, these benefits do not account for the substantial debt burden future generations would bear to fund these tax cuts.
In a separate analysis, Vice President Kamala Harris’s economic proposals were evaluated, including enhancements to the Child Tax Credit, Earned Income Tax Credit, extended premium tax credits, support for first-time homebuyers, and an increase in the corporate tax rate to 28%.
This analysis projects an additional $2.3 trillion in spending and a $1.1 trillion increase in tax revenue over ten years, resulting in a primary deficit increase of $1.2 trillion, or $2 trillion when including economic feedback effects.
Harris’s campaign has confirmed support for revenue increases outlined in President Biden’s fiscal 2025 budget, which aims to cut deficits by $3 trillion through higher taxes on the wealthy. However, the budget impact of proposals to eliminate taxes on tips for service workers was not included due to uncertainties in revenue reclassification.
