NEW YORK (Reuters) - Republican presidential hopeful Donald Trump’s tax proposal would cut taxes for households and businesses but would significantly raise the national debt, according to an analysis by the centrist Brookings-Urban Institute Tax Policy Center.
While federal taxes would be lower for households across all income levels, the highest earners - the top 1 percent and particularly the top 0.1 of 1 percent - would reap the largest rewards, according to the analysis, which was released on Tuesday.
The plan would reduce federal revenues by $9.5 trillion in its first decade and the U.S. national debt would jump by as much as 80 percent of the country’s gross domestic product by 2036, which could drag on growth, the analysis found.
“It’s just gaping holes in the budget,” Roberton Williams, a senior fellow at the Tax Policy Center, said of Trump’s plan. “You can’t really cut revenues as much as the plan would do and still have a functioning government that still looks anything like the government we have right now.”
In September Trump proposed making the U.S. tax code simpler and a one-time levy on the overseas earnings of U.S. companies. He promised he would cut the top tax rate for all businesses to 15 percent from the present 35 percent.
“The policy speaks for itself and many experts including [economist and media commentator] Larry Kudlow have praised the plan since its release in September,” Trump spokeswoman Hope Hicks said in an email.
Republican presidential candidates have laid out a variety of tax proposals, particularly touting the various ways they can lower tax rates for households and businesses.
Trump, a billionaire real estate developer and reality television star, remains the front runner for the Republican nomination for the November 2016 presidential election. He has emphasized his business acumen as among his top credentials for the White House, pointing to his success in making money as a sign that he can boost the world’s biggest economy.
He currently has support from 31 percent of his party in a five-day rolling poll from Reuters/Ipsos dated Dec. 18. His next-closest rival, Senator Ted Cruz, has support from 17 percent of the party.
For more on the 2016 presidential race, see the Reuters blog, “Tales from the Trail” (here)
Reporting by Luciana Lopez; Editing by Bill Trott
Our Standards: The Thomson Reuters Trust Principles.