Trump Policy Price Tag $5.3T, Clinton $200B: Budget Group

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By Jonathan Nicholson

Sept. 22 — The bipartisan Committee for a Responsible Federal Budget said Donald Trump’s proposals, including the significantly revised tax outline put forward days ago, would cost $5.30 trillion over 10 years, while Hillary Clinton’s would cost $200 billion, according to an updated analysis released Sept. 22. Both estimates were down from the CRFB’s previous estimates released in June, when Trump’s price tag came in at $11.5 trillion and Clinton’s at $250 billion.

“Based on our preliminary update to our central estimates, both Clinton and Trump would increase the debt relative to current law—though Trump would increase it by an order of magnitude more, and Clinton’s plan would slightly reduce deficits if we incorporated unspecified revenue from business tax reform,” the CRFB said in its update to its June “Promises and Price Tags” report.

Economic Impacts Small

Current laws would result in government debt held by the public rising to $23.118 trillion in the next 10 years from about $14.073 trillion, according to the Congressional Budget Office. Under Trump, the debt would increase to $28.40 trillion, according to the CRFB. Under Clinton, that rise would be to $23.30 trillion.

The CRFB included some caveats with its new numbers. It said it largely used the conventional portion of the libertarian Tax Foundation’s revenue estimate for Trump’s revised tax plan. It also mostly used the conventional estimate by the nonpartisan Tax Policy Center for its numbers on Clinton’s proposed tax policies.

Trump has said in the past his plan should be judged on a dynamic basis, where the revenue and spending impact on the government’s bottom line is estimated from a proposal’s impact on the overall economy, if any. In a Sept. 15 appearance at the Economic Club of New York, Trump said taking those impacts into account would cut the costs of his tax plan from $4.4 trillion over 10 years to only $2.6 trillion.

Many economists and budget analysts doubt that assessment. In its analysis, the CRFB wrote, “In our assessment, the macroeconomic impact of either candidate’s plan is likely to be small—and possibly negative—over a ten-year window.”

Neither the Trump campaign nor the Clinton campaign responded to requests for comment on the report.

Ambiguity in Tax Plan

The Clinton score also included three new policy details from the Clinton campaign that help reduce its cost: an estate tax structure originally proposed by Sen. Bernie Sanders (I-Vt.) that would tax large estates—starting at those over $10 million—at rates ranging from 50 percent to 65 percent, based on size; elimination of “step-up basis” of capital gains at death and a limitation on the ability to defer capital gains on like-kind exchanges of goods.

The group said there was also uncertainty about some details of Trump's revised tax plan, specifically how it would affect so-called pass-through small businesses that are not incorporated like publicly traded companies.

“When it comes to taxation of pass-through businesses, which pay taxes through the individual tax code, significant ambiguity remains under Trump’s plan. One interpretation is that these businesses would pay the individual tax rate of up to 33 percent; another is that they will pay the 15 percent corporate rate,” the group said.

“This ambiguity led the Tax Foundation to publish a $1.5 trillion range of estimates to reflect the policy uncertainty. Our estimates take the mid-point of this range for our central estimate, recognizing that Trump’s tax plan could cost as much as $750 billion more or less than this estimate.”

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Heather Rothman in Washington at hrothman@bna.com

For More Information

The CRFB analysis is available at http://src.bna.com/iP2.

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