An influential analysis published this month found that President Donald Trump's tax cuts and spending proposals would jump-start the economy in the short term, while Kamala Harris's would immediately slow economic growth.
A budget model from the Wharton School of the University of Pennsylvania shows that in the long run, both candidates' proposals would result in slower growth than the baseline estimate, but growth would be even lower under a Harris administration.
Under Harris' proposal, gross domestic product would be 1.3% lower than under current law by 2034. Thirty years later, the economy would be 4% slower. Harris' tax plan would discourage capital investment and reduce work hours, resulting in wages falling 0.8% in 2034 and 3.3% by 2054.
In contrast, President Trump's plan is expected to increase GDP in the near term compared to that projected under current law. However, the model projects that GDP would decrease by 0.4% by 2034 and 2.1% by 2054 due to the drag from a growing budget deficit. The model finds that capital investment and hours worked would increase during President Trump's term and decrease thereafter. This would result in average wages remaining the same in 2034 and decreasing by 1.7% in 2054 compared to current law.
In other words, the long-term impact of Harris' policies is expected to be twice as great as Trump's.
Harris' plan is expected to raise both taxes and government spending. Models estimate that the tax hikes would raise revenues by $1.1 trillion, but this would be offset by her proposed $2.3 trillion in spending increases, resulting in a $1.2 trillion increase in the deficit.
Tax cuts opposed by President Trump are expected to reduce revenues by $5.8 trillion over the next decade, but additional growth is expected to increase the primary deficit by just $4.1 trillion.
The model shows that Trump's proposal would benefit Americans of all income levels, while Harris' proposal would hurt the wealthy and only benefit low- and middle-income households.
