Analysis-Trump’s tax cut pledges are coming fast and furious in waning days of campaign
2024.10.11 06:22
By Gram Slattery and James Oliphant
WASHINGTON (Reuters) – Republican presidential candidate Donald Trump is rolling out a new tax-cut proposal about once a week in an unusual rush in the final stretch of the campaign to sway voters in an election that could be decided by just a few thousand votes.
Trump’s parade of giveaways comes at a time when presidential hopefuls are typically busy fine-tuning existing proposals rather than making a host of new ones with little acknowledgment of the fiscal cost to be paid down the road.
Want to buy a car? Trump has a tax cut for you. Wish you did not have to pay taxes on tips, or working overtime, or your Social Security? Trump has proposals to help you there, too.
With a little over three weeks left until Election Day, both the former president and his Democratic rival, Vice President Kamala Harris, are indulging in some economic populism to lure voters. Many economists say Trump’s promises, if fulfilled, are by far the biggest budget-busters.
Trump pledged in a marathon Detroit Economic Club speech on Thursday to allow consumers to deduct the interest on car loans, a plan he said would boost the U.S. auto industry. He did not mention the bill American taxpayers could be left footing.
Less than 24 hours earlier, he had promised Americans living abroad that he would end double taxation. Some American expats are required to pay taxes to both the U.S. government and foreign authorities.
Michigan, an automotive manufacturing hub, is a pivotal battleground in the Nov. 5 election and opinion polls show the race there between Trump and Harris to be neck and neck.
“He’s a salesman at heart, and one of his advantages in sales, as in politics, is that he’s unencumbered by shame or consistency or policy details,” said Liam Donovan, a Republican strategist in Virginia who doesn’t work for Trump’s campaign.
“In this case, Trump is trying to close a deal, and the spate of policy proposals are a bid to give the customer what they want.”
Six of Trump’s tax ideas were rolled out in September and October, while another three were announced since mid-May, according to a Reuters tally.
Along with the auto loan tax credit, Trump has promised to do away with taxes on tips and overtime hours for wage workers, eliminate a cap on a tax deduction known as “SALT” enjoyed mainly by wealthy taxpayers, and eliminate taxes on Social Security benefits.
Trump recently also promised to reduce the corporate tax rate from 21% to 15% for companies that make their products in the U.S. and give companies purchasing heavy machinery a tax credit.
Some of the proposals appear geared toward groups Trump will need to win on Nov. 5.
Trump first rolled out his pledge to eliminate taxes on tips during a rally in Las Vegas in June. The service sector is a major employer in Nevada, and many hotel and casino workers in that hotly contested battleground state would stand to gain directly from the proposal.
‘HE’S TRYING TO GET ELECTED’
Harris has also put forth tax proposals in recent weeks that would cut taxes for a large swath of voters and expand the deficit. She has also pledged new investments in child care and healthcare.
Michael Bloomberg, the former New York mayor and former Democratic presidential candidate, was critical of both campaigns, accusing them of “pandering” and of being fiscally reckless. The Harris campaign declined to comment.
“Pandering for votes is standard practice in election campaigns,” Bloomberg said in an opinion piece posted on Thursday on the Bloomberg LP news site. “But the tax-policy proposals on offer during this presidential contest are setting new standards for shamelessness.”
Most of Bloomberg’s venom was aimed at Trump, whose policies, he said, are “a recipe for disaster.”
The Trump campaign said its proposals would put more money in the pockets of everyday Americans, though it did not address fiscal concerns in a statement to Reuters.
“If Americans want less taxes and more money in their pockets, the only option is to vote for President Trump,” Trump campaign press secretary Karoline Leavitt said.
The campaign says revenue from increased tariffs and a broadened tax base from higher growth would make up for any shortfall. Economists are not convinced.
The Committee for a Responsible Federal Budget, which advocates reducing federal deficits, estimated on Monday that Trump’s tax cut proposals up to then would add $7.5 trillion to the federal deficit over 10 years – compared with $3.5 trillion for Harris’. Other economists have said his proposals would disproportionately benefit the richest Americans.
Most, if not all, of Trump’s tax proposals would require approval by Congress, control of which is currently divided between Democrats and Republicans. While that may change after the election, both chambers will likely be closely divided, making approval of complex legislation a challenge.
Arthur Laffer, a longtime economic adviser to Trump who frequently discusses tax policy with the former president, said Trump was no different from other politicians who make campaign promises on the trail.
“He’s trying to get elected, for God’s sake,” Laffer said. “He’s thinking of what things can I do that would be good politically, and also be good for the economy.”
