Kamala Harris, the U.S. Vice President and Democratic Party nominee, has unveiled an economic plan aimed at reducing costs and enhancing economic opportunities for middle- and lower-class Americans. Her proposals, include significant initiatives such as tax credits, affordable drug coverage, and housing incentives.
Key Components of Harris' Economic Plan:
1. Extending Tax Cuts:
- Harris plans to maintain tax cuts introduced under the 2017 Tax Cuts and Jobs Act for individuals earning less than $400,000 annually. However, she proposes increasing the corporate tax rate from 21% to 28% to generate additional revenue. While this approach could bring in more funds, there are concerns that even partially extending these tax cuts could be costly.
2. Reinstating the Child Tax Credit:
- Harris seeks to reinstate the expanded child tax credit from the 2021 American Rescue Plan, which had reduced child poverty to a historic low of 5.2% in 2021. Her proposal includes a $3,600 credit per eligible child and a $6,000 credit for newborns.
3. Federal Ban on Price Gouging:
- Harris is advocating for a federal law to prevent price gouging on essential goods like food and groceries. While this aims to make the market more competitive, some economists warn that price controls could be counterproductive, though others see potential benefits in curbing monopolistic practices.
4. Housing and Health Care Initiatives:
- To address housing shortages, Harris proposes subsidies of up to $25,000 for first-time home buyers and tax incentives for real estate developers.
- In healthcare, she plans to cap out-of-pocket costs for prescription drugs at $2,000 annually and set the price of insulin at $35 per month.
5. Ending Federal Taxes on Tips:
- Both Harris and former President Donald Trump have proposed eliminating federal taxes on tips. Critics argue that this is more of a political gesture than a serious economic policy, and there are concerns it could reduce federal tax revenues.
Fiscal Impact:
Harris' plan is expected to increase the federal deficit by $1.7 trillion over the next decade, according to the Committee for a Responsible Federal Budget. However, her campaign argues that these costs can be offset by raising taxes on the wealthy and large corporations.
Overall, Harris' economic proposals are designed to target affordability and provide economic relief to lower- and middle-income Americans, but they come with potential trade-offs that could have long-term fiscal implications. Source: AL Jazeera + Bloomberg money is a central force in U.S. presidential elections