One thing you hear from supposed independent voters is that they “want to hear more” from the candidates, this year Kamala Harris and Donald Trump, “on the issues.”
We heard plenty from Harris and Trump in the ABC News event on Tuesday, and what we’re going to do here at AFP is break down the debate, issue by issue, to build a sort of voter guide.
We’re starting today with the economy.
What will Kamala Harris and Donald Trump do to build on where we are now?
The Kamala Harris plan: Bottom up
Harris, at this week’s debate, talked up two main things: an expansion of the child tax credit and an expansion of the tax deduction for people starting small businesses.
“We know that young families need support to raise their children. And I intend on extending a tax cut for those families of $6,000, which is the largest child tax credit that we have given in a long time, so that those young families can afford to buy a crib, buy a car seat, buy clothes for their children.
“My passion, one of them, is small businesses. I was actually, my mother raised my sister and me but there was a woman who helped raise us. We call her our second mother. She was a small business owner. I love our small businesses. My plan is to give a $50,000 tax deduction to start-up small businesses, knowing they are part of the backbone of America’s economy.”
Analysis: The Trump campaign platform has been mum on the future of the child tax credit, which is set to drop to $1,000 per child in 2025 after Republicans voted last month to block an expansion of the current credit, which is set at $3,600 per child under 6 years old and $3,000 per child age 6 to 17.
The Harris plan would boost where we are now to $6,000 for newborns and $3,600 per year for children above the age of 1.
The proposed $50,000 tax deduction for start-up small businesses would be a tenfold increase from the current federal tax deduction for start-ups, which is $5,000.
On average, it costs $40,000 to start a new business, so this tax deduction is aimed at helping entrepreneurs get their start.
According to the Small Business Administration, the 33 million small businesses in operation account for 46 percent of all private-sector employees in the U.S.
This, you could call, a bottom-up strategy, focused on, yes, helping people – helping families, helping small businesses – but from an economics perspective, it’s putting money in the hands of people in the working and middle classes.
The Donald Trump plan: Top down
All we got from Trump on the economy was his part of the back-and-forth on his plan to supposedly raise billions of dollars in new revenues through tariffs.
“We’re doing tariffs on other countries. Other countries are going to finally, after 75 years, pay us back for all that we’ve done for the world. And the tariff will be substantial in some cases,” said Trump, claiming that, in his term as president, the U.S. “took in billions and billions of dollars, as you know, from China.”
“In fact, they never took the tariff off because it was so much money, they can’t. It would totally destroy everything that they’ve set out to do. They’ve taken in billions of dollars from China and other places. They’ve left the tariffs on,” Trump said.
Analysis: Trump did impose tariffs on China, in 2018, and, it didn’t work. A conservative think tank, American Action Forum, concluded that the tariffs ended up costing U.S. consumers $195 billion, and led to the loss of 245,000 American jobs.
Another independent analysis from The Tax Foundation called the Trump tariffs “one of the largest tax increases in decades.”
And what Trump has been saying at campaign rallies is that he would dramatically increase the tariffs on China, from a range of 10-25 percent to 60 percent across the board, which, combined with other proposed new tariffs from Trump, would amount, according to The Tax Foundation, to a $524 billion-a-year tax increase and lead to the loss of 684,000 U.S. jobs.
It is true that Biden has maintained a number of the Trump-era tariffs, and Harris has been mum on what she would do regarding the future on that.
In her remarks on the proposed Trump tariff increases at the debate on Tuesday, she called them “the Trump sales tax,” and made the point that Trump is putting so much into his tariff scheme because he wants to be able to claim, as he tried to do with his 2018 tariffs, that the monies that come into the federal treasury from tariffs can be counted as offsets against his desire to perpetuate deep tax cuts for the super-wealthy.
“Economists have said that Trump’s sales tax would actually result for middle-class families in about $4,000 more a year because of his policies and his ideas about what should be the backs of middle-class people paying for tax cuts for billionaires,” Harris said.
The data on those 2017 Trump tax cuts bear out her point: according to research from the Tax Policy Center, “households with incomes in the top 1 percent will receive an average tax cut of more than $60,000 in 2025, compared to an average tax cut of less than $500 for households in the bottom 60 percent.”
This is another version of the top-down strategy that we first saw from the Reagan years in the 1980s with so-called “trickle-down” economics that didn’t actually trickle down.
Video: Kamala Harris, Donald Trump on the economy
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Chris Graham
