Republican presidential nominee Donald Trump has taken a lot of heat for proposing a tax plan that would cost at least $12 trillion over 10 years if enacted. In response to that criticism, Trump and his advisers have implied that a new, less costly plan is in the works. But Trump isn't the only candidate in the race who seems unconcerned about adding to the deficit. Despite proposing an array of new taxes, Democrat Hillary Clinton's overall budget plan would add at least $745 billion to the federal deficit over 10 years.
The problem with Trump's plan is that he is proposing massive tax cuts without many offsets. Trump's original proposal would lower the top income tax rate to 25 percent, reduce the corporate tax rate to 15 percent, and dramatically increase the standard deduction. The billionaire seems to want to combine traditional Republican goals (lower corporate rate, lower income tax rates) with his own brand of populism to appeal to the middle class (the increased standard deduction would remove millions of taxpayers from the income tax's reach).
Hillary's deficit problem doesn't come from tax cuts. Although she has proposed a few targeted tax cuts, most of her plan is about increasing progressivity and raising more revenue from upper-income earners. Clinton's plan would impose a minimum 30 percent tax on those with income over $1 million (the so-called Buffett rule), add a 4 percent surcharge on those earning more than $5 million, raise the estate tax, and reform capital gains taxation to tie the rate more closely to holding periods. According to Moody's, Clinton's plan would raise about $1.46 trillion in new revenue. That's exponentially more in new revenue than any of the small change offsets proposed by Trump.
Clinton runs into a deficit issue because she is pairing her tax plan with a lot of new spending. Moody's estimates that Clinton would spend about $300 billion more on infrastructure over the next 10 years, $700 billion more on education, $300 billion on new worker leave policies, and $200 billion more on new economic development programs (these are mostly the sum of the very targeted incentives that Hillary has proposed, emulating her husband). Combined with eliminating the sequester cuts, Clinton's plan would increase spending by about $2.2 trillion.
Clinton's plan does not add nearly as much to the deficit as Trump's, of course. But she can't exactly claim to be focused on deficit reduction either. Clinton has decided that progressive spending programs designed to appeal to Bernie Sanders's supporters are more important than keeping the federal deficit under control. This is a major difference with her husband, who not only ran on a strong deficit reduction platform (which was partly influenced by Ross Perot's presence in the 1992 campaign) but actually carried through with deficit reduction in his 1993 budget. It also shows how far deficit reduction has receded in the consciousness of both parties since 2012.
In 2012 Mitt Romney went out of his way to try to present his tax plan as revenue neutral. This was to contrast with the reckless deficits of the Obama administration. In 2016 neither candidate seems all that concerned about appearing as a deficit hawk. Unless Trump or Clinton governs a lot different than they campaign (which they almost certainly will), expect deficit reduction to be a much bigger theme in the 2020 election, when the Congressional Budget Office predicts that another fiscal crisis will be beginning.