by CHRIS LEE
The Harris campaign released a detailed economic plan on September 29 which addresses inflation, housing affordability, child tax credits, and taxes. The plan offers new ideas to support small businesses and key industries like AI, but a large part of the plan is expanding current Biden/Harris policies like increasing taxes on the wealthy, cutting student loan debt, subsidizing the Affordable Care Act, and lowering the cost of prescription drugs. The plan proposes raising the corporate tax rate to 28% from 21%, while cutting taxes on incomes below $400,000.
The plan was delivered during a speech at Carnegie Mellon University where she talked about creating an “Opportunity Economy.” The crowd enjoyed the speech especially as it touched on small business support, apprenticeships, and funding for innovative industries.
Her most important and largest budget item is making the refundable child tax permanent. If the child tax credit was not allowed to expire, the child poverty rate would have been 50% lower: 8.4% versus 12.4% in 2022 according to the Center on Budget and Policy Priorities.
The US economy is doing well and has returned to pre-covid norms. The September jobs report recorded an additional 254,000 jobs, inflation was down to 2.4% over the last 12 months and there were 8 million open jobs in August. All, according to the Bureau of Labor Statistics.
The politics of the plan
The economic plan was released at a crucial time in the campaign. Many voters list the economy as their biggest issue. Polls show voters believe former President Donald Trump would handle the economy better. Undecided voters say their No. 1 issue is “wanting to know more about her economic proposals.” The plans were released as an 82-page briefing document. The plan lists more than 40 proposals.
Harris’s plan is detailed with many initiatives aimed at the middle class. Harris frequently uses many of her proposals during her campaign speeches. The campaign’s economic plan is targeted at swing voters who are unsure about her ability to be president.
How will the Harris plan help Black voters?
Harris’s economic plan aims to help Blacks, the middle class, and the working poor. Her core proposals: expand the child tax credits and Earned Income Tax Credits, help first-time home buyers, and fund business start-ups. Would all benefit Black people.
What is often overlooked is that as President, Harris and her team set the tone and direction of U.S. national economic policy. The president decides what matters in the economy. VP Harris’s policies broadly benefit middle-class workers. And by extension Black People. Trump’s economic policies, other than restricting immigration, largely benefit the wealthy and corporations.
While Harris rarely mentions race-specific programs, she does talk about Black issues. She wants to increas funding for HBCUs, help Black small businesses, build generational wealth, help Black farmers, and create more job apprenticeships. As a senator, she endorsed funding for a reparations study commission. She supported the Green New Deal but later modified her position.
Trump’s economic message
In contrast, President Trump has not put forward anything close to a detailed plan for the economy. Trump focuses entirely on the message. The closest he came to an economic agenda was a rambling speech to the Economic Club of NY. He spent 20 minutes attacking Biden, Harris, and immigration. He then offered tax breaks to the wealthy. He did outline a plan to use “cheap energy” and tariffs to grow the economy. And then dodged a question on childcare.
Trump’s core economic plan consists of five key points: restricting immigration, reducing the cost of energy, reducing regulations, cutting the corporate tax rate to 15%, and “no taxes on tips.” He also proposes tariffs on imported goods which would raise the price of imported goods.
The Harris-Walz economic plan aims at the middle class
Let’s look at some of the important details of the Harris / Walz economic plan. The plan focuses on four key areas: inflation/affordability, taxes, government help for the middle class, and support for key industries.
Housing: Her biggest proposal is to increase the number of housing units by 3 million during her administration. About 1.2 million units would come with tax incentives for private developers. Additional credits would support owners rehabilitating existing property. There is also a $40 billion housing innovation fund. However, housing is a local issue and there is generally little the federal government can do. Housing is closely tied to the mortgage interest rate which is determined by the US Federal Reserve. The “Fed” is an independent branch of government.
Rent affordability: Harris briefly discussed cracking down on corporate investments in rental properties. She had proposals to curb predatory investing by corporations and to prevent landlords from colluding to raise rents. She stopped short of endorsing Biden’s proposal to cap rent increases at 5% for existing properties.
Down payment assistance: Harris includes providing $25,000 in assistance for first-time homebuyers. There will also be additional assistance for homebuyers whose parents did not own a home. There is some controversy, since many economists believe homeowners will simply raise prices by the same $25,000 amount which will fuel inflation.
Take on price gougers in the grocery and rental industry. She would use the FTC to stop price gouging in the supermarket industry. Her message is that she will be tougher on tougher on monopolies, mergers, and excessive price increases.
Child Tax Credits: Harris’s most important plan is to restore the $3,600 tax credit for children This is the largest spending proposal and probably the most important. She would also add a $6,000 credit for each newborn child in the first year. This tax credit reduced the poverty level when enacted by 50%.
Affordable Care Act: She would cut premiums for the ACA and add more funding.
Prescription Drug Prices: Harris has proposed expanding Medicare drug negotiation power to all pharmaceutical drugs beyond the current 10 common drugs. She would extend the $35 dollar co-pay cap on insulin.
Taxes: Raise the corporate tax rate from 21% to 28%. This is her largest revenue item. The revenue would be used to fund other social programs without increasing the national debt. Her plan also would let the Trump tax cuts expire and replace them with tax relief for those making $400,000 dollars a year or less.
Small Business: Harris wants to increase the number of new businesses to 25 million from the current level of 16 million. That’s a 50% increase. Harris also wants to expand the new business tax from $5,000 to $50,000. She cites during her speech that the average cost of starting a new business is $40,000.
Expanding apprenticeships: Harris wants to double apprenticeships.
No tax on tips: Harris quickly adopted the policy of no tax on tips, showing campaign nimbleness, and reducing a major Trump issue in Nevada. Some have argued that the policy itself, lets employers substitute tips for paying decent wages.
Industrial Policy: Harris has proposed subsidies for key U.S. industries such as artificial intelligence, bio-manufacturing, aerospace, clean energy, and computing.
Biden Administration policies Harris would continue or expand
Harris would allow the Tax Cuts and Jobs Acts (TCJA) to expire or be amended to limit tax cuts to those making below $400,000.
Harris says she will not interfere with Federal Reserve decision-making. The “FED” will remain independent.
Kamala Harris would raise the minimum wage nationally.
Analysis: What Harris’s economic policy discussions are missing
Harris does not tackle big, difficult economic issues, but winning an election is a big, difficult economic issue. Great candidates also set aspirational goals. Inspirational candidates put “a chicken in every pot,” but great candidates also tie their economic policies to the bigger, long-term picture. They answer the “Why” question.
Three big things are missing from her economic plan. How will VP Harris discuss difficult economic issues, like creating good jobs; how she will handle an economic crisis like the mortgage crisis, and how will she demonstrate inspirational economic leadership? The need for quality jobs and reducing inequality are not going away.
Here are some major economic policies not covered in the Harris/Walz economic plan. The plan makes little mention of some important economic issues: creating quality jobs, the national debt, Medicare and Social Security, the environment, the military budget, long-term housing affordability, education, infrastructure, or reparations.
Summary
The Harris-Walz economic plan offers many proposals that benefit Black people, middle-class Americans, and the poor. While it has few new ideas and dodges difficult questions, it is a detailed plan and stands in stark contrast to her opponent. President Trump has proposed a much less detailed economic plan, preferring to discuss immigration, energy, and tax cuts.
We will see who wins. The choice is yours.