Kamala Harris, as Vice President and presidential candidate, has outlined an economic plan that targets the reduction of living costs for middle and working-class families, fosters economic growth in underserved areas, and bolsters social service programs. Her plan, while sharing similarities with Bidenomics, also presents distinct differences.
Key aspects of Harris’s economic strategy include tax code revisions, cost of living reduction, and addressing income disparities. The plan is designed to support middle and working-class families, with a focus on job creation and overall economic growth. Initially, Harris faced scrutiny for a lack of clarity on specific proposals. The Harris-Walz campaign emphasizes the importance of ‘building up the middle class.’ Harris pledges to cut taxes, lower everyday item costs, create jobs, and stimulate economic expansion. She asserts her belief in capitalism and free markets. 1. Cost of Housing Addressing the high cost of housing, a pressing issue in the U.S., is central to Harris’s plan. Her campaign advocates for constructing 3 million new housing units to alleviate the national housing shortage. Harris also proposes tax incentives for homebuilders of starter homes for first-time buyers and a $40 billion innovation fund to assist local governments in addressing housing shortages. Additionally, she plans to enable federal lands to be repurposed for affordable housing. Harris promises $25,000 in down payment support for eligible first-time homebuyers, ensuring inclusion of first-generation buyers, and a $10,000 tax credit for first-time homebuyers. 2. Renting Legislation The Harris-Walz administration intends to urge Congress to pass two bills concerning renting. The Stop Predatory Investing Act, introduced in 2023, aims to eliminate tax benefits for investors with 50 or more single-family homes for rent. The Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, introduced in 2024, targets companies that inflate rental prices. 3. Lowering Healthcare Costs Harris’s plan also addresses the high cost of prescription drugs and medical debt. She proposes capping insulin costs at $35 and prescription drug out-of-pocket expenses at $2,000. Harris also aims to expedite Medicare negotiations to reduce drug prices and prevent pharmaceutical companies from hindering competition. Building on her vice presidential work, she intends to collaborate with states to cancel medical debt for millions. Harris also proposes banning price gouging by grocery chains and ending taxes on tips.The Harris-Walz campaign released its policy website ‘A New Way Forward’ in September 2024.
Investments in Community Development Financial Institutions (CDFIs): During her vice presidency, Kamala Harris supported providing access to capital in underserved communities. In 2022, she formed the Economic Opportunity Coalition (EOC) to help minority, rural, and low-income communities develop small businesses. This is an expansion of her support for CDFIs, which provide funds for economic growth in rural and low-income areas. In April 2023, Harris and the U.S. Treasury Department announced that the fund had awarded more than $1.73 billion in grants to CDFIs. At the 2024 Freedman’s Bank Summer Symposium, the Biden-Harris administration announced that the EOC had plans to commit $3 billion in corporate deposits to CDFIs by 2025. The administration also highlighted that the Emergency Capital Investment Program (ECIP), which Harris helped pass as a senator to support financial institutions in lending to underserved communities, had invested $8.57 billion into community financial institutions to support small businesses and consumers negatively impacted by the COVID-19 pandemic. Impact on Middle- and Working-Class Families: Harris’s proposals to lower the cost of living, including plans to decrease housing and grocery prices, aim to help the middle and working class. The candidate said in a speech in North Carolina in August that costs are still too high and it’s hard for many people to get ahead. As president, she will be focused on creating opportunities for the middle class to advance their economic security, stability, and dignity. Harris has proposed more tax relief, including an expansion of the Child Tax Credit to provide a $6,000 tax cut to families with newborn children and restoring the American Rescue Plan’s expanded Child Tax Credit of up to $3,600 per child tax credit for middle-class and working families. The Harris-Walz administration also said it would expand the Earned Income Tax Credit to help workers with low and moderate incomes by reducing their tax burden. Harris’s plan includes cutting taxes to make health insurance on the Affordable Care Act Marketplace. Job Creation and Economic Growth: Job creation and economic growth have been in the spotlight recently following years of high inflation, interest rate hikes, and continuous concern about a potential recession. At the Democratic National Convention in Chicago in August, Harris talked about creating an ‘opportunity economy’ in which everyone has the chance to compete and succeed. She said that as president, she will bring together labor and workers, small business owners and entrepreneurs, and American companies to create jobs, grow the economy, and lower the cost of everyday needs.Kamala Harris recently proposed a $50,000 tax deduction for new small businesses, which is above the current $5,000 break. Her campaign aims to encourage 25 million new small business applications in the first two years of a potential presidential term.
Many of her economic growth proposals revolve around lowering the cost of housing, groceries, and other essentials, and providing access to capital for small business owners. Her plans for these are more detailed than those for job creation. Addressing Income Inequality Harris’s economic plan includes measures to bring down costs for lower-income Americans and crack down on predatory practices by large corporations and investors. For example, her proposed ban on price gouging would make groceries more affordable and curb profits for retail giants. In her first 100 days as president, she would encourage Congress to pass a national ban on price gouging for food, give the Federal Trade Commission and prosecutors authority to pursue ‘bad actors’, and examine big grocery chain mergers. Her housing affordability proposals include lowering rental costs and discouraging real estate investors from buying and renting out single-family homes by reducing their tax incentives. The vice president’s ‘opportunity economy’ focuses on economic fairness. She says ensuring every American has economic security is part of this plan. Her push for providing financing for underserved communities could help break down income inequality by enabling more people in rural and low-income areas to start businesses. In continuation of the Biden-Harris administration’s work, she has also advocated for protecting social safety programs like Social Security and Medicare. Criticisms and Challenges One of Harris’s challenges is presenting a clear vision for the future that builds on Biden’s presidency but isn’t solely defined by it. Her background as a prosecutor has also faced criticism for making it difficult to develop that vision. Prior to becoming a senator, Kamala Harris was attorney general of California. Harris has received pushback for her proposal to ban price gouging at grocery stores. Economist Carl Schramm characterized it as ‘price controls’. Harris, like her rival Trump, has proposed ending income taxes on tips, a move some economists say would benefit a small percentage of the workforce and lowest paid and could encourage other professions to replace wages with tips. Background of Kamala Harris’s Economic Priorities Before becoming vice president, Kamala Harris was a senator from California.In 2018, Kamala Harris introduced the LIFT (Livable Incomes for Families Today) the Middle Class Act. This act would have provided a $3,000 per year tax credit for individuals and $6,000 for married couples, benefiting lower-income earners through the tax code. During her 2020 presidential run, Harris stated that if she became president, she would repeal the Tax Cuts and Jobs Act (TCJA) passed by Donald Trump, which implemented broad tax cuts for high-income individuals and corporations. As vice president, Harris supported Biden in reinvigorating the economy after the COVID-19 pandemic. The American Rescue Plan passed in March 2021 included $1,400 stimulus checks and extended unemployment benefits. The administration also fought to protect and expand the Affordable Care Act, enabling Medicare to debate drug prices and making health care plans more affordable. The Biden-Harris administration forgave up to $20,000 in student loan debt for borrowers with incomes less than $125,000 and who were Pell Grant recipients, and up to $10,000 for those who were not. In 2023, it attempted to forgive more than $430 billion in student loan debts and implement the Saving on a Valuable Education (SAVE) Plan, though both attempts were blocked. Biden and Harris also passed the CHIPS and Science Act, which invested in domestic semiconductor manufacturing and research, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act. Harris previously proposed a Medicare For All plan funded through taxes on financial transactions, including a 0.2% tax on stock trades and a 0.1% tax on bond trades. However, in August 2024, a campaign official said Medicare for All is no longer on Harris’s agenda. As vice president, Harris launched Central America Forward (CAF) to invest in northern Central America and create jobs to slow migration. In March 2024, she announced CAF had generated more than $5.2 billion since May 2021. Harris has been active in protecting voting rights, reproductive freedom, and maternal health, and oversees the White House’s first-ever Office of Gun Violence Protection. Harris’s top priorities if elected include lowering the costs of living for everyday Americans, cracking down on corporations increasing those costs, and creating economic opportunities in underserved communities. Many aspects of her plan involve expansions of the work she and Biden have overseen during their administration. When he was president, Donald Trump’s economic policies were mainly characterized by tax cuts, trade wars and tariffs, deregulation, and restrictions on immigration. The TCJA, which includes many reforms expiring in 2025, lowered taxes for both individuals and corporations. His tariffs and trade war with China are also among the best-known aspects of his policy.
Kamala Harris’s economic plan, if elected, could have significant implications for the American public. Unlike a second Trump term, which might involve more tariffs and tax cuts, Harris’s agenda diverges in some key areas. Harris’s stance on the Tax Cuts and Jobs Act (TCJA) differs from Biden’s. While Biden has proposed extending tax breaks only for those earning under $400,000, Harris calls for a complete repeal of the act. On the issue of student loan debt and medical debt forgiveness, Harris is expected to continue the Biden-Harris administration’s efforts. In 2024, Biden forgave $7.4 billion for 277,000 borrowers and an additional $1.2 billion for 35,000 borrowers. Harris’s plan also includes canceling medical debts for millions, as announced in collaboration with the Consumer Financial Protection Bureau (CFPB), which would eliminate medical debt from 15 million Americans’ credit reports. Harris’s economic proposals aim to lower the cost of living. She proposes banning price gouging at grocery stores and removing tax benefits for investors who rent many single-family homes. Additionally, she plans to provide $25,000 in down payment support for first-time homeowners and increase the housing supply. Harris also aims to end taxes on tips and build on her accomplishments as vice president by further lowering the cost of prescription drugs, reducing the burden of medical debt, and expanding the Child Tax Credit.