Effects of the Clinton and Trump Tax Plans on the National Debt

Discussion:

Trump's tax plan is estimated to add $11.2 trillion to the deficit over the next 10 years. Clinton's tax plan is estimated to reduce the national debt by $1.25 trillion over the same 10 years.

The estimates are relative to current law. By reducing the deficit, Clinton's plan would slow the growth of the national debt considerably, but it would still grow. On the other hand, Trump's plan would dramatically increase the deficit, and hence would add $11.2 trillion more to the debt on top of what is already estimated to be added under current law. The cumulative result would be a national debt of $40 trillion in 2026 under Trump's plan or a national debt of $28 trillion in 2026 under Clinton's plan.

Clinton's plan would lower the deficit by raising taxes on the wealthy. The Tax Policy Center estimates that 95% of tax payers would see no change in their taxes and that almost all the impact of the tax increases would fall on taxpayers making more than $300,000 per year.

Trump's plan would lower taxes for every bracket, but would only very slightly lower the taxes of the working and middle classes, while radically cutting the taxes of the wealthy. The Tax Policy Center estimates that the bottom fifth by income would see a 1% reduction in their taxes, those in the middle fifth would see their taxes drop by 4.9%, and the top 1% of earners would receive a 17.5% reduction in their taxes.

The economic effects of an additional $11.2 trillion in debt are hard to overstate and would most definitely dramatically outweigh a 4.9% reduction in taxes.

Despite the perception that Republicans are more fiscally responsible, Democratic presidents have generally been better on the debt than Republican presidents. The Democrats' superior performance on the debt is due in part to their greater willingness to tax the wealthy, but is also due in part to the stronger economic performances we have seen under Democratic presidents.

See more graphs about:

Debt

Political and Economic News

WaPo: President Trump seems to be saying more and more things that aren’t true

Chait: Why Trump Is Using Hostage Tactics on Family Separation

Slate: Family separation is horrifying, but we can’t go numb and turn away.

Chait: Trump Confesses Motive, Blows Up Legal Basis For Trade War

Chait: Trump Is Fulfilling Russia’s Dream of Splitting the West