As the 2024 presidential election approaches, President Joe Biden and former President Donald Trump have outlined distinctly different economic plans to appeal to voters. Trump’s agenda focuses on expanding his 2017 tax cuts, enforcing strict immigration controls with mass deportations, imposing tariffs on all U.S. imports, and dismantling Biden's clean energy initiatives. (Photo : by BRENDAN SMIALOWSKIJIM WATSON/AFP via Getty Images)
As the 2024 presidential election approaches, President Joe Biden and former President Donald Trump have outlined distinctly different economic plans to appeal to voters. Trump's agenda focuses on expanding his 2017 tax cuts, enforcing strict immigration controls with mass deportations, imposing tariffs on all U.S. imports, and dismantling Biden's clean energy initiatives.
In contrast, Biden plans to extend some of Trump's tax cuts but exclude those for the wealthy and corporations. He proposes targeted tariffs on Chinese imports and tighter immigration controls, though less severe than Trump's.
Biden's broader agenda includes making childcare more affordable, providing free college tuition, canceling more student loan debt, and lowering drug prices. Analysts, however, caution that these proposals might struggle to pass in a divided Congress.
A study by Moody's Analytics predicts that Trump's policies could lead to a recession by mid-2025, with an average annual growth rate of 1.3% during his term, compared to 2.1% under Biden. The analysis also forecasts higher inflation under Trump, rising from 3.3% to 3.6% next year, versus a projected 2.4% under Biden. Additionally, Trump's tenure could result in 3.2 million fewer jobs and a higher unemployment rate of 4.5% compared to Biden's term.
Despite these projections, public opinion polls show greater trust in Trump's economic management. An ABC/Ipsos poll from April indicates that 46% of respondents trust Trump on economic issues, compared to 32% for Biden. However, even some right-leaning economists warn that Trump's trade and immigration policies could damage the economy.
Moody's assumes that Biden would face a Democratic-majority House and a Republican Senate, while Trump would benefit from Republican control of both chambers. Economic impacts of these plans are complex and based on historical data, with Trump's tariff policies potentially leading to significant job losses and a smaller economy by 2028.
Taxes
Trump aims to work with a Republican Congress to extend the Tax Cut and Jobs Act (TCJA) for both individuals and corporations, with the current tax rates set to expire in 2025. He has also proposed further reducing the corporate tax rate from 21% to potentially 15% and allowing companies to continue immediate deductions for new investments. Although these tax cuts might counterbalance higher tariffs, they are projected to increase the national debt by $5.2 trillion through 2035 and raise long-term interest rates, according to Moody's.
Biden's tax plan focuses on extending lower personal income tax rates for those earning less than $400,000 annually, aiming to reduce the deficit and curb inflation by stimulating consumer spending. Biden also proposes increasing the corporate tax rate from 21% to 28%, though gaining Congressional support for this change might be challenging. Economic analyses suggest that while extending tax cuts could boost capital spending and growth, the benefits might be limited due to full employment and labor shortages, potentially worsening inflation, which the Federal Reserve is striving to manage.
Trump has vowed to deport millions of undocumented immigrants, reinstating his "remain in Mexico" program and the Title 42 policy, which rapidly expels immigrants to Mexico without allowing them to seek asylum. Trump has indicated that these measures could be implemented through executive actions, bypassing the need for congressional approval.
Biden, facing criticism over a surge in illegal immigration, has taken steps to toughen border enforcement, including an executive action to bar asylum for migrants crossing the border illegally during times of high influx. Biden's broader strategy involves seeking congressional funding to increase border patrol agents, immigration judges, and asylum officers. He also aims to raise the refugee admission cap to 125,000 and has introduced a policy to protect the undocumented spouses of U.S. citizens from deportation.
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