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What we know about Kamala Harris' economic plans on taxes, housing, manufacturing
Some of her ideas build on unfinished business in President Joe Biden's economic agenda but expand their scope and size.
Democratic presidential nominee and U.S. Vice President Kamala Harris addresses members of the National Association of Black Journalists (NABJ) in Philadelphia, Pennsylvania, U.S., September 17, 2024. / Reuters/Piroschka van de Wouw
(Reuters) -U.S. Vice President Kamala Harris has announced a basket of economic proposals aimed at lowering living costs for middle- and lower-class Americans and boosting the economy overall by using tax incentives and other tax shifts.
Some of her ideas build on unfinished business in President Joe Biden's economic agenda but expand their scope and size.
Here's what we know so far:
INDUSTRIAL INCENTIVES
Harris on Sep.25 pledged new tax credits to spur more domestic manufacturing and to invest in sectors that will "define the next century," including biomanufacturing, aerospace, artificial intelligence, quantum computing and blockchain, advanced nuclear power, and batteries.
She also said she would offer tax incentives for expanding "good union jobs" in long-standing iron, steel, coal and other traditional industrial communities. Details on the size and scope of the incentives and investments were not announced.
Harris announced new investments in U.S. basic technology research, through the National Science Foundation, the Department of Energy's National Laboratories and other institutions.
She also announced plans to cut red tape to speed the construction of new infrastructure and industrial projects and to use the Defense Production Act and other tools to boost U.S. capacity to process critical minerals and reduce reliance on supplies from China.
TAX ON THE WEALTHY
Harris has echoed Biden's promise not to raise taxes on households that earn less than $400,000 a year.
She has quietly endorsed most of the nearly $5 trillion in tax hikes over a decade in Biden's fiscal 2025 budget proposal, which would boost the top income tax rate to 39.6 from 37 percent.
These include a new 25 percent minimum tax on people with fortunes exceeding $100 million, including on unrealized capital gains. For those earning more than $1 million annually, Harris has proposed raising the long-term capital gains tax rate paid after selling assets like stocks to 28 percent from 20 percent, an increase far smaller than the 39.6 percent full top income tax rate proposed by Biden.
TAX ON BUSINESSES
Harris has proposed increasing the corporate tax rate to 28 percent, partially reversing former President and Republican rival Donald Trump's 2017 tax law, which cut company tax rates to 21 percent from 35 percent. The step would raise $1 trillion for the federal government over a decade, budget experts estimate, but cut into company profits, Wall Street says.
Big U.S. companies pay a far lower effective tax rate than their foreign competitors at an average of 16 percent, a Reuters analysis showed. Any broad corporate tax changes would need to be passed by Congress.
CHILD TAX CREDIT
Harris has kept Biden's proposal to permanently restore a one-year, COVID-19-era increase in the Child Tax Credit to as much as $3,600 per child from $2,000 currently, which is scheduled to drop to $1,000 after 2025. She also has proposed a $6,000 bonus onetime credit for families with newborns.
Trump's vice presidential running mate, JD Vance, has floated raising the annual Child Tax Credit to $5,000, but the idea has not been adopted as an official Trump policy proposal.
AFFORDABLE HOUSING
Harris has detailed plans to spur new construction and reduce costs for renters and homebuyers, largely through tax incentives. They include tax credits for builders of homes for first-time buyers and affordable rental units, along with a $25,000 tax credit to help first-time buyers with down payments for the next four years.
Harris is also proposing a $40 billion "innovation fund" to encourage local governments to build more affordable homes, doubling a Biden budget proposal that would make competitive grants to local governments that show they can get results.
U.S. home prices have risen 50 percent in the last five years and rents have risen 35 percent, according to real estate firm Zillow, largely due to a housing shortage. Harris has set a goal to increase U.S. housing construction by 3 million units over the next four years.
SMALL BUSINESS TAX CREDIT
Harris also has deviated from Biden's economic plan by proposing to increase the tax deduction to up to $50,000 for new small business start-up costs from $5,000 currently to support entrepreneurs. The 33 million U.S. small businesses were responsible for 70 percent of net new jobs created since 2019, according to Small Business Administration data.
CHILD CARE
"My plan is that no family, no working family, should pay more than 7 percent of their household income in child care," Harris told the National Association of Black Journalists in September. U.S. parents are currently paying as much as 19.3 percent of median family income per child for care, Department of Labor figures show.
The 7 percent figure echoes the Child Care and Development Block Grant, a program Harris has touted that currently supports about 1 million children in low-income families.
Harris' campaign has not detailed how the child care plan would work.
HIGH GROCERY PRICES
Harris has vowed to enact the "first-ever federal ban on price gouging on food and groceries" that aims to stop big corporations from unfairly exploiting consumers while generating excessive profits. Defining such excessive price hikes is not clear, but some proposals in the U.S. Senate show a potential path to enactment.
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