For the first time since President Joe Biden ended his re-election campaign 51 days ago, the American people have been given a course in Kamalanomics. The vice president’s 2024 campaign posted a policy page on its website outlining her agenda, titled “A New Way Forward.” The platform was divided into four sections, including “Build an Opportunity Economy and Lower Costs for Families.” Many of Harris’ proposals were a mix of the current commander-in-chief’s aims with her own vision of what the next four years may bring if she is elected in November.
Kamalanomics 101
The Harris campaign’s primary message was that the vice president would unify the country, from organized labor to entrepreneurs to American companies, “to create good paying jobs, grow the economy, and ensure that America continues to lead the world.” Her staff wrote on the website:
“Vice President Kamala Harris has made clear that building up the middle class will be a defining goal of her presidency. That’s why she will make it a top priority to bring down costs and increase economic security for all Americans. As President, she will fight to cut taxes for more than 100 million working and middle class Americans while lowering the costs of everyday needs like health care, housing, and groceries.”
Here is a breakdown of her economic agenda:
Cut Taxes for Middle-Class Families
- Restore the Child Tax Credit and Earned Income Tax Credit.
- No one earning less than $400,000 a year will pay more in taxes.
- Target the wealthy.
The trouble with inflation is that it upgrades individuals to a higher tax bracket. So, when President Biden unveiled the $400,000 pledge in 2020, it might have seemed a lot at the time, but across-the-board cumulative inflation has weighed on household finances. Additionally, Harris has pledged to “roll back” the Trump-era tax cuts – they are set to expire in 2025, so rolling back is unclear – but doing so would effectively raise taxes for 62% of Americans, according to the Tax Foundation.
Like Biden, the vice president aims to enact a billionaire minimum tax, quadruple the tax on stock buybacks, and make the tax rate on long-term capital gains for those making $1 million or more per year 28%. “Because when the government encourages investment, it leads to broad-based economic growth and creates jobs, which makes our economy stronger,” the campaign says.
A billionaire minimum tax or higher levies on stock buybacks might initially sound like a good policy. However, after performing a cost-benefit analysis, officials might determine that the consequences outweigh the potential benefits (or effects on the financial markets versus federal revenues). So, for instance, the minimum billionaire tax has been estimated to raise $500 billion over ten years, which would be enough to cover about 4% of the cumulative net interest payments in this span.
Make Rent More Affordable and Home Ownership More Attainable
- Build three million affordable rental units and homes.
- Cut red tape to construct more housing faster.
- Offer $25,000 in down payment assistance to first-time homebuyers.
Three million new units might put a sizable dent in the national housing shortage, but based on various industry estimates, it still falls short of what is needed. Moreover, because the government is involved in one of the most subsidized sectors in the country, a potential Harris-Walz administration will likely fall short of this aim.
Now, handing out free money to help Americans with their down payments might seem like a strategy to alleviate housing affordability challenges. However, the effort would raise home prices by $25,000 – down payment assistance is higher for first-generation homeowners – because it would bolster demand when supply is exceptionally tight. Home prices are at all-time highs, while median asking rents are slightly below record levels.
Grow Small Businesses and Invest in Entrepreneurs
- Set a goal of 25 million new business applications.
- Expand startup expense tax deduction for new businesses.
- Boost share of federal contract dollars going to small businesses.
The vice president has attempted to counter former President Donald Trump’s moniker of “Comrade Kamala” by highlighting her support for small businesses. The administration continues touting the “record 19 million new business applications.” It should be noted that the Census Bureau’s data are based on future projections. Meanwhile, the problem with this record figure is that small business bankruptcies are also up 60% since January 2023. Plus, a new law will make it harder for small- and medium-sized businesses to file bankruptcies, which will skew the data and present the incoming president in a positive light and champion for the little guy.
That said, any time a business is required to pay fewer taxes is a worthy ambition.
Take on Bad Actors and Bring Down Costs
- Stop corporate price gouging.
- Fight anti-competitive practices.
As Liberty Nation News has reported, banning so-called price gouging is akin to price controls. First, it is merely a political term, not an economic one. Second, the data confirms that corporations are not price gouging and are not contributing to inflation. Third, a federal ban on corporate price gouging will not pass Congress. Fourth, commanding prices will breed unintended consequences in the marketplace – they have already produced them in the prescription drug industry! – such as shortages, higher costs for other products, and a paucity of innovation.
Strengthen and Bring Down the Cost of Health Care
- Lower drug prices and cap insulin costs.
- Forgive medical debt.
- Combat maternal mortality.
The current administration has tried to protect patients from higher medical care costs by capping insulin to $35 and out-of-pocket costs to $2,000. Did it work? According to a study published in the Annals of Internal Medicine, limited prices did not result in higher insulin usage or make a dent in out-of-pocket costs for patients enrolled in the typical health care coverage plan.
Twenty million people possess medical debt, totaling around $220 billion. So, it makes sense that many Americans support this idea, according to a recent University of Chicago Harris School of Public Policy/Associated Press-NORC Center for Public Affairs Research poll. Forgiving medical debt would be another tab the government could not afford. Plus, once again, there would be a plethora of unintended consequences: fewer individuals paying their medical bills, less access to medical care, physicians requiring upfront payment before offering care, and price hikes.
Protect and Strengthen Social Security and Medicare
- Keep Social Security and Medicare benefits intact.
- Make the rich pay their fair share.
“Vice President Harris will protect Social Security and Medicare against relentless attacks from Donald Trump and his extreme allies,” the Harris campaign wrote. “She will strengthen Social Security and Medicare for the long haul by making millionaires and billionaires pay their fair share in taxes. She will always fight to ensure that Americans can count on getting the benefits they earned.”
All the vice president’s men have zero clue how to keep the retirement scheme intact. This was the shortest section of them all. Aside from some vague allusion to making the rich pay their fair share, the Harris team failed to highlight how they will prevent a 20% reduction in benefits in ten years, how to reverse the trust fund exhaustion in the next decade, and how to grapple with the $63 trillion in long-term unfunded liabilities.
Support American Innovation and Workers
- Subsidize corporations.
- Raise the minimum wage.
- End taxes on tips.
First, based on the digression in this part of the policy page, a potential Harris presidency would clearly maintain the Bidenomics’ tenet of subsidizing domestic and foreign corporations to keep them in the United States or attract them to the world’s largest economy. Second, Harris would do anything for the labor unions, whether signing pro-union legislation or supporting collective bargaining. Third, Harris “will not tolerate unfair trade practices” but stopped short of detailing how to prevent it (tariffs were not mentioned). Fourth, the campaign noted that “she’ll fight to raise the minimum wage” but did not offer a number (it has been at $7.25 since July 2009).
Provide a Pathway to the Middle-Class Through Quality, Affordable Education
- High-quality child care and pre-school.
- Strengthen government education.
- Forgive more student loan debt.
Child care costs are spiraling out of control, rising to as much as $17,000 in 2022 after adjusting for inflation. According to a recent projection by Moody’s Analytics, a universal child care and pre-school scheme would cost about $70 billion per year. Because it is government, it would be more appropriate to round up to $100 billion.
(Photo by John Tully/Getty Images)
Public school grades have fallen over the last 25 years, administrative staff volumes have surged, and federal education spending has rocketed. What else would Harris do to resolve the crisis gripping the government education system? The campaign refrained from offering specific solutions.
Finally, the administration has forgiven nearly $200 billion in student loan debt for about 47 million individuals. Of course, some of this was reversed by the Supreme Court. But Harris wants to continue this public policy endeavor, even if it breeds unintended consequences: higher tuition costs, students obtaining worthless degrees, and transferring the costs to taxpayers.
Lower Energy Costs and Tackle the Climate Crisis
- Build on Biden’s energy policies.
- Stay in global commitments.
- Invest in climate action.
The vice president’s election campaign was quiet on future energy policies. Instead, the page highlighted President Biden’s policies and alluded to vague pursuits of “continuing and building upon the United States’ international climate leadership.” It added: “She and Governor Walz will always fight for the freedom to breathe clean air, drink clean water, and live free from the pollution that fuels the climate crisis.”
But Trump
The campaign took a swipe at the Republican presidential candidate and tried connecting him to the Heritage Foundation-linked Project 2025 agenda. Harris’ economic agenda “is a stark contrast” to Trump’s plan, according to the website. “Trump’s economic plans would also trigger a recession by mid-2025, cost America over 3 million jobs, threaten hundreds of thousands of clean energy jobs, increase the debt by over $5 trillion, send inflation skyrocketing, and hurt everyone but the richest Americans,” the page said.
After weeks of avoiding the press and making public policy announcements, the Harris campaign outlined her economic platform, which includes $5 trillion in tax hikes over ten years with no spending cuts. The update comes ahead of the election cycle’s first and potentially only debate on Sept. 10. For now, economists can debate, engage, and weigh the pros and cons of Kamalanomics and Trumponomics.
