Robertson Williams and James R. Hines Jr. discuss the U.S. presidential candidates' tax plans.

If the tax plan of the Republican presidential candidate Donald Trump is overly ambitious, that of his Democratic Party rival Hillary Clinton is too modest to have a major economic impact. “It’s night and day,” says Roberton C. Williams, fellow at the Urban Institute-Brookings Tax Policy Center of the differences. Trump is promising massive tax cuts for individuals and businesses, but his plan will cause a $6.2 trillion revenue loss over 10 years, according to a study by the Tax Policy Center. However, seven million families will pay higher taxes with changes in exemptions and the standard deduction. Clinton’s plan would raise taxes on the wealthiest one percent, but grow tax revenues by only $1.5 trillion over 10 years. She also wants to expand child tax credits for low-income families.

Trump’s tax cuts would worsen the national debt, which is set to cross $20 trillion (it’s at $18.96 trillion now), says James R. Hines, Jr., law professor at the University of Michigan. The U.S.is already running a budget deficit of $550 billion annually, and nothing has been done to bridge the funding gaps in the Social Security and Medicare programs, he adds. He also thinks Trump’s plan is unrealistic in betting on sufficient economic growth to solve the debt problem. Trump’s tax cuts would mean high government borrowing that would suck household savings and crowd out the private investment required to boost economic growth, he explains. He finds little economic impact from Clinton’s modest tax increases, either.

All said, campaign promises will need support from a hard-nosed Congress before they become reality, cautions Williams. One big task for the next president would be to make U.S. corporate taxes competitive to remain business-friendly, says Hines. Williams and Hines discuss the two candidates’ tax plans on the Knowledge at Wharton show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

For another perspective on the Trump and Clinton tax plans, check out Knowledge at Wharton’s recent interview with Wharton’s Kent Smetters.