The economic strategies outlined by Vice President Kamala Harris and former President Donald Trump reflect contrasting visions for addressing major economic challenges.
Both candidates propose extensive plans intended to make everyday living more affordable, which is a predominant concern among voters, yet their methods and anticipated impacts differ significantly.
Addressing Expiring Tax Cuts
Former President Donald Trump’s approach to expiring tax cuts from the 2017 Tax Cuts and Jobs Act involves extending all individual income and estate tax cuts. This includes increasing the standard deduction and lowering marginal income tax rates. On the corporate front, he proposes reducing the corporate tax rate to 15% for certain companies, aiming to boost investment in equipment and research.
Vice President Kamala Harris, on the other hand, plans to maintain tax cuts for individuals earning under $400,000 but is keen on reversing cuts for the wealthiest. She proposes raising the capital gains tax to 28% for high earners and supports a billionaire minimum tax, impacting those worth over $100 million. Harris also suggests increasing the corporate tax rate from 21% to 28%.
Tax Elimination Proposals
Harris aims to abolish federal income taxes on tips, thereby attracting hospitality workers, particularly in battle states like Nevada. However, payroll taxes on tips would persist. Despite not benefiting all tip workers, this move could create positive ripples in the service industry.
Trump’s vision encompasses abolishing both federal income taxes and payroll taxes on tips, social security benefits, and overtime pay. This broad-ranging tax relief, while easing burdens on workers, could potentially lower future social security payouts and undermine the program’s financial foundations.
By eliminating federal taxes on social security benefits, Trump seeks to win the senior vote, targeting higher-income individuals who still pay these taxes. Meanwhile, removing taxes on overtime pay could enhance workforce morale but might impact social security trust funds without alternative revenue sources.
Middle-Class Support
Harris’s approach provides tax relief to potentially 100 million Americans, largely within the middle class. Central to her policy is the revival of the American Rescue Plan’s child tax credit expansion and the introduction of enhanced credits for young families.
Further strengthening the care economy, Harris proposes covering costs for home health aides under Medicare, alongside expanding coverage for essential health services such as vision and hearing care. This aims to ease burdens on families caring for both children and aging parents.
Trump focuses on reducing cost-of-living pressures by capping credit card interest rates and making car loan interest deductible. These measures largely benefit higher-income earners but may not significantly address middle-class financial challenges.
A shift in strategy for senior care under Trump seeks resource allocation to home-care services and tax incentives for unpaid family caregivers, aiming to address care worker shortages and support family caregiving dynamics.
Trade and Tariff Adjustments
Trump proposes widespread tariffs including a substantial tariff on Chinese imports and harsh penalties for companies moving production outside the U.S. These tariffs, purported to boost domestic manufacturing, may instead raise consumer prices and provoke international trade tensions.
Harris critiques Trump’s tariff plans as detrimental to consumers and workers. She is open to revisiting the U.S.-Mexico-Canada Agreement to better protect American workers, although she remains vague on specific tariff adjustments.
In her criticism, Harris calls Trump’s tariff strategy a “Trump Tax,” linking it to increased consumer prices due to import duties. Her focus remains on safeguarding workers’ interests in trade policy discussions.
The international ramifications of Trump’s tariffs could complicate relations and trade negotiations, with the potential for retaliative measures from trade partners under looming economic uncertainties.
Strategies to Reduce Prices
Harris identifies corporate profiteering as a cause of high grocery prices, proposing a ban on price-gouging during crises to protect consumers. By focusing on large corporations, her plan mirrors state-level measures against exploitative pricing.
Trump promises to lower prices by increasing fossil fuel production and rescinding funds allocated by the Inflation Reduction Act. He does not, however, provide detailed strategies for pricing reductions across essential commodities.
By increasing drilling and reducing regulations, Trump believes the fuel price reduction will translate to broader economic advantages, despite global market dependencies. Harris’s price-gouging ban, however, aims to curb unreasonable price hikes at a more immediate consumer level.
Both candidates propose methods they believe will moderate price escalation, though analyses suggest varied long-term impacts on economic behaviours and inflationary pressures.
Making Housing Affordable
Harris’s plans focus on first-time homebuyers and renters by proposing down-payment support and blocking algorithm-driven rent hikes. She also targets wealthy buyers dominating rental markets to enhance fairness.
Trump favours deregulating housing markets and utilising federal lands for housing development but lacks detailed policy outlines on achieving these goals. His stance on undocumented immigrants affecting housing costs further complicates his housing proposals.
Health Care Affordability Initiatives
Harris’s health agenda builds on the Biden administration’s successes, such as extending premium subsidies under the Affordable Care Act and expanding Medicare’s negotiation power on drug prices.
Her proposals also focus on rural healthcare, aiming to recruit healthcare professionals and support rural medical services to address healthcare disparities.
Although Trump emphasised healthcare reform in his first term, his current campaign lacks a robust healthcare framework, offering only general ideas about repealing the Affordable Care Act.
Without detailed plans, Trump’s healthcare strategies remain theoretical, with an emphasis on revisiting Obamacare repeal, leaving voters uncertain of practical outcomes.
Investment in U.S. Businesses
Harris’s support for small businesses includes increasing startup tax deductions and easing interstate business operations through administrative simplification. She also aims to direct federal contracts towards small enterprises.
The “America Forward” tax credit initiative targets strategic industries, promoting domestic manufacturing and technological advancement while prioritising worker rights and community development.
Conversely, Trump’s focus remains on lowering corporate taxes and imposing tariffs, which he argues will fuel manufacturing growth. However, historic data shows these can lead to job reductions due to global retaliatory tariffs.
The economic strategies proposed by Harris and Trump present contrasting visions for business growth. Harris emphasizes innovation and sustainability, whilst Trump leans towards protectionism and deregulation.
The economic frameworks presented by Harris and Trump reveal distinct paths towards growth and stability.
Through varied approaches, it is evident that structural differences between their plans could lead to different impacts on the nation’s economic future.
