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On Taxes, a Sharp Campaign Contrast Between Harris and Trump
The Harris campaign seems eager to tax the rich and corporations while Trump vows to preserve and expand tax cuts for the wealthiest and says little about how to pay for that.
Sep 09, 2024
As U.S. Vice President Kamala Harris and former President Donald Trump get ready to debate for the first time this week, what can we expect from their campaigns in terms of taxes?
Harris endorses multiple proposals to generate revenue from the richest people and the biggest corporations and deliver a middle-class tax cut—with the former paying for the latter. Trump would cut some middle-class taxes but promotes a new tariff tax on imports that would hike the price of nearly everything Americans purchase and, doubling down on past practice, he’d slash taxes for millionaires and corporations. He hasn’t identified a single business or billionaire that should pay more.
When Trump and congressional Republicans passed the 2017 tax law, they made massive tax cuts for corporations permanent but set the individual cuts, which were heavily skewed to the extremely wealthy, to expire at the end of 2025. This means taxes are on next year’s policy agenda in a way that rarely comes along. The approaches articulated by the campaigns would pull the nation in profoundly different directions.
Trump Proposals
Trump says he would again slash corporate tax rates, keep all corporate cuts from the 2017 tax law, extend 2017’s expiring cuts for everyone including the uber-wealthy, and impose large tariffs that fall on everyone who spends money on anything.
Trump’s tariff tax proposals—60% tariff taxes on imports from China and 20% on all other imports—would cost the typical American household over $2,600 a year according to economist Kim Clausing. Earlier analysis of a previously-discussed 10 percent worldwide tariff tax shows an increase in inflation resulting from the plan, which would also generate $2.8 trillion in revenue over the next decade, raised from consumers.
Much of that revenue would go to corporations. When lawmakers cut the corporate rate from 35% to 21% in 2017, corporate tax payments plummeted, and huge, profitable corporations continued to pay far below the statutory rate. We’d see this on steroids if Trump slashed the corporate rate to 15%. Such cuts increase income and racial inequality and send a massive windfall—40 cents of every dollar—to foreign investors.
The law that the Trump administration passed in 2017 delivered enormous tax cuts to those in the top 1%, a narrow sliver of well-off people with income over $800,000 a year. These individual cuts for the rich expire in 2025, but the Trump campaign wants to make them permanent, sending almost two-thirds of that money to the richest fifth of Americans. This would cost more than $280 billion in 2026 alone, slashing revenue that could otherwise provide tax cuts for middle-income Americans, reduce the national debt, or fund childcare, healthcare, or infrastructure.
Republican Vice Presidential candidate J.D. Vance has mentioned more than doubling the Child Tax Credit but has provided few details and Trump has not signed on.
Harris Proposals
Harris backs most of the revenue raisers and middle class tax cuts laid out in President Joe Biden’s 2025 budget. The revenue components raise nearly $5 trillion over a decade, entirely from wealthy people and corporations, reducing inequality, both economic and racial, and generating funds for things the American people need.
Harris plans to boost revenue from corporations by raising the corporate rate, increasing the corporate minimum tax, increasing the stock buyback tax, and reining in corporate offshore tax avoidance. She’d better tax the wealthy by allowing expiration of the parts of the 2017 tax law that exclusively help those making more than $400,000. For those who make over $1 million a year, Harris would eliminate tax breaks on capital gains and dividends. For incomes exceeding $100 million a year, she’d tax currently exempt investment income that many billionaire CEOs receive. These provisions would do much to reform a tax code that most Americans say raises too little from corporations and the wealthy.
Harris would fully extend temporary tax cuts from the 2017 tax law for people earning less than $400,000 and try a new down-payment assistance program for some first-time homebuyers. She’d also expand the Child Tax Credit to $6,000 for newborns, $3,600 for children up to age five, and $3,000 for older children. This is one of the best and most well-proven ways to cut poverty, reduce inequality, and help middle-class families.
Tip Gimmick
Both campaigns support eliminating taxes on tips. This could encourage wealthy professionals to reclassify fees as tips and there are better ways to help workers—raising the minimum wage, eliminating the paltry $2.13 sub-minimum wage, and increasing the Earned Income Tax Credit. Harris would limit her exemption to workers earning less than $75,000—an improvement Trump leaves out—but this doesn’t redeem a fundamentally flawed proposal.
In Sum
Campaign proposals reveal two very different paths. The Harris campaign seems eager to tax the rich and corporations, cut taxes for middle-income taxpayers, reduce poverty, reduce inequality, and raise revenue for public spending. Trump vows to preserve and expand tax cuts for the wealthiest people and corporations and says little about how to pay for that beyond a tariff that raises much less than Harris’ plans and falls on consumers. His proposals would inevitably force cuts to important public programs or run up the national debt.
The entire tax code is up for debate in 2025. Our system asks far too little of wealthy people and corporations. Americans should listen closely to both campaigns and push for policies that raise more from those most able to pay, give tax cuts to those who most need them, and generate resources to invest in public priorities.
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Harris Applauded for Proposing First-Ever Ban on Corporate Price Gouging
"It's wonderful to see the vice president unleash a suite of policy proposals to crack down on these cheaters and protect Americans' pocketbooks," said one advocate.
Aug 15, 2024
Economic justice advocates on Thursday applauded the Harris campaign's announcement the Vice President Kamala Harris is planning to unveil a historic ban on food and grocery price gouging amid widespread discontent about costs that have ballooned by 26% in the last five years.
The Democratic presidential candidate is expected to unveil the proposal for the first-ever federal price gouging ban at a rally in Raleigh, North Carolina on Friday, detailing plans to direct the Federal Trade Commission (FTC) to impose "harsh penalties" on companies that hike food prices to pad their profits.
As president, the campaign said late Wednesday, Harris would set "clear rules of the road to make clear that big corporations can't unfairly exploit consumers to run up excessive corporate profits on food and groceries," building on actions President Joe Biden has taken, such as the creation of a Strike Force on Unfair and Illegal Pricing and his guidelines aimed at reining in corporate mergers.
The rules would be introduced in Harris' first 100 days in office, should she win the presidential election in November.
Wenonah Hauter, executive director of Food & Water Action, said Biden and Harris have set out to correct "decades of failure by federal leaders to tackle food monopolies [that] have sent grocery prices skyrocketing."
"President Biden finally turned the corner with real action against ill-advised corporate mergers, and the Harris campaign's signals of intent to work even harder against food profiteering are encouraging," said Hauter. "We look forward to seeing robust antitrust policy that will make a difference in our wallets, and send the food monopolies packing."
Food & Water Action pointed out that the proposal came a day after it was announced that the multinational food company Mars would acquire its competitor, Kellanova, for $36 billion "in a bid to dominate snack market sales at consumers' expense."
Such acquisitions have continued, said Food & Water Action, even as the monthly food cost for a family of four sticking to inexpensive groceries to save money increased 50% over the past four years, while the top four grocery companies in the U.S. saw their revenues go up as much as 36%.
"The cost of a whole chicken rose 41%, while poultry giants Tysons Foods and Perdue saw revenue increases of 22.5% and 54.9%, respectively," said the group.
While grocery prices have gone up by just 1% in the past year, costs have not eased since they shot up due to supply chain and labor issues during the coronavirus pandemic.
A Gallup poll in May found that 41% of Americans viewed the high cost of living as the most pressing financial issue for their families, and a survey by public opinion research group Blueprint found in June that penalties for companies that price gouge had the support of 81% of respondents, including 86% of Independent voters.
"It's hard to get down an aisle in the grocery store without finding an example of price gouging or price fixing, and it's costing us dearly," Lindsay Owens, executive director of the think tank Groundwork Collaborative, told The Washington Post. "It's wonderful to see the vice president unleash a suite of policy proposals to crack down on these cheaters and protect Americans' pocketbooks."
On social media on Thursday, Owens exposed "some of the worst offenders" who raise prices with the goal of boosting profits—a major driver of inflation, according to an analysis by Groundwork earlier this year.
"Practices like shrinkflation (that half empty bag of chips) and it's evil twin skimpflation (like when Wishbone salad dressing swaps the oil for water), or Walmart rigging the produce scales to charge a little more on a pound of oranges, are everywhere," said Owens. "It's wonderful to see that Harris will address her plans to take on price gouging in the food and grocery sector tomorrow. She has a strong track record of going after cheaters from her time as California's top lawyer, and through her great work this past four years."
As Americans express strong support for price gouging penalties, said David Sirota, founder of The Lever, Harris' proposal will "inevitably" push Republican presidential nominee Donald Trump into defending corporations that willfully force families to pay more for essentials.
The proposal will "bait the entire American right into screaming, 'Let them eat cake' as they go on record in support of food conglomerates fleecing the working class," said Sirota.
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State Lawmakers Urge US Exit From Toxic ISDS Mechanisms in Trade Deals
"Outdated trade rules like ISDS can pose a real threat to states' sustainable energy initiatives and the good-paying jobs they create," said one lawmaker from Maine.
Aug 06, 2024
More than 300 state lawmakers signed a letter Monday calling on U.S. President Joe Biden to "eliminate the threat of Investor-State Dispute Settlement from all U.S. trade and investment agreements," joining hundreds of civil society groups and dozens of members of Congress in speaking out against rules that allow foreign corporations to challenge state laws.
The legislators—who include Democrats, Republicans, and Independents—expressed support for the official position of the National Conference of State Legislatures (NCSL) regarding ISDS, as the conference convened its annual summit in Louisville, Kentucky.
The NCSL opposes trade deals "with investment chapters that provide greater substantive or procedural rights to foreign companies than U.S. companies enjoy under the U.S. Constitution."
The Biden administration has agreed with the NCSL's call to exclude ISDS from any new trade agreements, but the U.S. is currently a party to more than 50 trade and investment deals that contain the rules.
"It's long overdue that we change course. Getting rid of ISDS, which embodies the runaway corporate power embedded in our trade deals, is a great place to start.
ISDS rules empower corporations to sue governments if they claim their profit margins are harmed by public programs, such as public health regulations, environmental rules, food safety guidelines, or climate laws aimed at reducing fossil fuel emissions.
"The outcomes of these cases, which can result in billions of U.S. tax dollars paid to foreign corporations in compensation, are
determined in unaccountable tribunals presided over by unelected corporate lawyers whose rulings are not subject to appeal," reads the Monday letter from state lawmakers, including North Carolina state Rep. Pricey Harrison (D-61), New York state Sen. Liz Krueger (D-28), and Florida Rep. Anna Eskamani (D-42).
According to the letter, "even cases that get dismissed can result in countries paying millions in tribunal costs."
Harrison said in a statement that "the era of corporate-dominated trade policy" has contributed to a loss of 40% of North Carolina's manufacturing jobs.
"It's long overdue that we change course," said Harrison. "Getting rid of ISDS, which embodies the runaway corporate power embedded in our trade deals, is a great place to start. These extreme corporate rights undermine democracy and critical public interest protections here at home and around the globe. I'm glad to see so many colleagues from across the political spectrum joining me in this effort."
Last November, 200 civil society groups demanded the elimination of ISDS within APEP, and three dozen members of Congress wrote to U.S. Trade Representative Katherine Tai and Secretary of State Antony Blinken last May saying the U.S. should end the system's use in its trade agreements.
Allowing corporations to sue over laws that cut into their profits, wrote the lawmakers on Monday, "threatens the policy space we need to maintain high-level public health standards, create clean energy jobs, protect the digital privacy and data-security of those we represent, and much more."
Maine state Sen. Craig Hickman (D-14) expressed concern about ISDS both as a lawmaker and "an organic farmer committed to curtailing the severe impacts of climate change and strengthening rural economies."
"Outdated trade rules like ISDS can pose a real threat to states' sustainable energy initiatives and the good-paying jobs they create,"
said Hickman. "I urge the administration to eliminate this antiquated mechanism that stands in the way of sustainable food systems and the clean energy economy we need to build for our children and grandchildren."
Note: This article has been edited to correct a reference to U.S. trade deals containing ISDS and the Americas Partnership for Economic Prosperity.
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