Trump's Large-Scale Tax Cut Plan Is a Major Cause
"$22 Trillion Fiscal Deficit Even Without Both Candidates' Pledges"
A new study has once again warned of the astronomical fiscal deficits that former U.S. President and Republican presidential candidate Donald Trump could cause.
According to a report released on the 7th (local time) by the bipartisan U.S. nonprofit organization, the Committee for a Responsible Federal Budget (CFRB), if former President Trump's campaign promises are implemented, the federal deficit the U.S. will bear over the next 10 years is estimated to reach $7.5 trillion (approximately 1,117 trillion KRW). This is more than twice the size of the deficit caused by Vice President Kamala Harris's promises during the same period, which is $3.5 trillion.
Both candidates, aiming to enter the White House in the upcoming November presidential election, are focusing on increasing spending rather than cost-cutting or tax hikes. In particular, both candidates are putting effort into child tax credits to win over middle-class voters, and the promise of tip tax exemption is a common denominator for both. However, former President Trump is pushing for tariff increases and reductions in income and corporate taxes, while Vice President Harris is advocating for increases in corporate and wealth taxes, marking a key difference.
Mark Goldwein, CFRB's senior vice president, pointed out, "Clearly, the promises from both sides do not stabilize the debt," and noted that the U.S. fiscal deficit is expected to increase by about $22 trillion over the next 10 years even without these promises. Currently, the U.S. fiscal deficit stands at approximately $28.3 trillion, about 99% of the Gross Domestic Product (GDP).
Despite both candidates proposing policies that would cause massive fiscal deficits, the reason why former President Trump's deficit increase is particularly large lies in his large-scale tax cuts. According to the U.S. center-right think tank Tax Foundation, if Trump's promises are actually implemented, the amount of tax reductions over the next 10 years would reach $11 trillion (approximately 1,460 trillion KRW). In particular, the permanent extension of the 2017 income and corporate tax cuts expiring at the end of next year and the child tax credit account for more than half of this reduction, at $4.3 trillion and $3 trillion respectively.
Vice President Goldwein explained, "Former President Trump has been announcing new tax cut promises at every campaign event," adding, "Six weeks ago, the deficit increases for Harris and Trump were similar, but that is no longer the case."
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