Trump Tax Cuts Exceed Agencies’ Cost: What to Know in Washington

Donald Trump is selling tax cuts to voters that would cost more than $9.8 trillion, or every dollar of non-defense discretionary spending over the next 10 years. But first, you should know:

• House Republicans want new citizenship requirements for voters in exchange for skirting a government shutdown.
• Joe Biden is preparing to block Nippon Steel’s takeover of US Steel.
• Kamala Harris plans to trim a capital gains tax increase proposed by Biden.

Trump Tax Cuts Cost More Than Almost All Federal Agencies

The tax cuts Donald Trump and running mate JD Vance are pitching to voters could cost up to $10.5 trillion over a decade, exceeding the combined budgets of every domestic federal agency.

The cost of Trump’s plans is so big that if Congress passed the tax cut proposals and kept spending flat, they could fund the military, federal benefit programs like Social Security, pay interest on the debt — and nothing else. That means eliminating federal agencies handling law enforcement, border security, air traffic control, tax collection, and international relations.

Republicans argue tax cuts boost growth, but it’s not clear how much Trump’s proposals, which largely cut levies for individuals rather than businesses, would spur new economic activity.

The impact of Vice President Kamala Harris’ proposed cuts — exempting tips from taxation and expanding the child tax credit — pales in comparison. She wants to offset the lost income, estimated at $2 trillion by one think tanks, with tax increases on corporations and wealthy individuals. Harris is rolling out policy ideas piecemeal, and recently called for an expanded deduction for start-up businesses.

It’s highly unlikely Trump’s promises would pass even in a Congress controlled by Trump allies. The Republican ticket’s tax proposals include extending Trump’s 2017 tax cuts, a big expansion to the child tax credit and exemptions for tips and Social Security payments. Read More

GOP Ties Noncitizen Voting to Government Funding

House Republicans want to make voters to show proof of US citizenship in exchange for averting a government shutdown.

Federal coffers run dry Oct. 1 unless Congress passes a stopgap spending bill, but conservative lawmakers say they won’t support short-term funding without including a plan to block noncitizens from polls. It’s Republicans’ latest attempt to place immigration concerns front and center in high-stakes negotiations on Capitol Hill, and exploit Democrats’ political vulnerabilities.

The issue is unlikely to force a shutdown. House Democrats largely oppose the legislation, and only five defected to support it in an otherwise party-line July vote. Some Republicans who support the bill believe it should be left off a continuing resolution, since it would cost Democratic votes. Even if House leaders move a CR with the bill attached, the Democrat-led Senate will likely strip it out.

That’ll force the House to pass a clean CR without the GOP rider. Most Republicans will want to avoid an October shutdown that could prove politically disastrous just before the election. Read More

Harris Pushes 28% Capital Gains Tax Rate on $1 Million Earners

Harris is paring back the capital gains tax increase proposed by President Joe Biden in a bid to court the business community and deep-pocketed donors.

Harris called for a 28% rate on people earning $1 million or more, touting it as a means to ensure the wealthy pay their fair share. Her proposal falls short of the 39.6% rate Biden embraced, setting apart her economic vision from the sitting president as voter skepticism of the administration’s economic record threatens to weigh down her ticket. The current capital gains tax rate is 20%.

Tax policy is taking center stage in the contest between Harris and Trump as the two pitch dueling measures aimed at courting key swing state voters and business leaders. Read More

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To contact the reporters on this story: Giuseppe Macri in Washington at gmacri@bgov.com; Jeannie Baumann in Washington at jbaumann@bloombergindustry.com

To contact the editor responsible for this story: Kayla Sharpe at ksharpe@bloombergindustry.com