US Vice President and Democratic Party nominee Kamala Harris is putting forward an economic plan aimed at reducing costs and boosting economic opportunities for middle- and lower-class Americans.
According to Bloomberg, the plan includes important proposals such as tax credits, providing affordable medicines, and housing incentives.
The proposals are expected to increase the federal deficit by $1.7 trillion over a decade, according to estimates from the Committee for a Responsible Federal Budget. However, the Harris campaign says the costs could be offset by higher taxes on the wealthy and big corporations.
Main components of the economic plan
- Tax cuts extended
Harris intends to keep in place the tax cuts introduced under former President Donald Trump’s 2017 Tax Cuts and Jobs Act for individuals making less than $400,000 a year, while increasing the corporate tax rate from 21% to 28%. While the plan could generate additional revenue, economists warn that extending even part of the law could be costly.
- Reactivating the Child Tax Credit
Harris proposes reactivating the expanded child tax credit from the American Rescue Plan of 2021, which expired after it reduced child poverty to a historic low of 5.2% in 2021.
The credit will increase to $3,600 per qualifying child, with a new $6,000 credit available for newborns.
- Federal ban on price increases
Harris is also calling for a federal law to prevent unjustified price increases on essential goods like food and groceries, in order to make the market more competitive, according to Bloomberg.
This proposal has faced criticism from economists who argue that imposing price controls could have negative effects, although some believe that increased oversight of monopolistic practices could be beneficial.
- Housing and Health Care Initiatives
To address the housing shortage, Harris proposes providing up to $25,000 in down payments for first-time homebuyers and tax incentives for developers.
In health care, Harris proposes capping out-of-pocket costs for prescription drugs at $2,000 per year and setting the price of insulin at $35 per month.
- End federal taxes on tips
Both Harris and Trump have proposed ending federal taxes on tips, but the proposal has been criticized as more of a political move than a serious economic policy, with concerns that it could reduce federal tax revenue.
