As the race for the White House intensifies, Donald Trump is banking on massive tax cuts, hoping for economic growth that could outweigh concerns over deficits, while Vice President Kamala Harris aims to impose higher taxes on corporations and the wealthy to fund programs for housing and families, reports AP.
Trump, the Republican nominee, believes tax cuts will drive investment, although critics argue his proposals, such as cutting the corporate tax rate from 21% to 15%, may balloon the national debt by over $6 trillion. Despite past growth never reaching his target of 3%, Census data show that between 2018 and 2019, median household income rose by $5,220 to $78,250.
On the other side, Harris, the Democratic nominee, plans to raise funds through tax hikes on the wealthy to support the construction of 3 million homes and offer a $6,000 tax credit for parents. Her proposals could add $2.3 trillion in spending, with $1.1 trillion coming from increased corporate taxes, according to the Penn Wharton Budget Model.
Both candidates diverge significantly on taxation and tariffs. Trump has floated the idea of a broad 10% tariff—potentially as high as 20%—on imports, which Harris’ campaign warns could cost households $4,000 annually. While Trump dismisses concerns that tariffs would raise inflation, Harris advocates for more sustainable approaches to middle-class relief, such as down payment assistance for first-time homebuyers.
Though Trump is less concerned about the national debt, Harris seeks to balance her initiatives by mirroring revenue sources proposed in President Joe Biden’s budget. Still, analysts predict that both plans would contribute to growing deficits, with impacts on income inequality depending on which candidate takes office.
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