Comparing Trump’s and Harris’ differing ideas on how to boost the economy

Democratic presidential nominee Kamala Harris unveiled more of her economic policies. In New Hampshire, Harris announced a proposal that would offer tax breaks for new small businesses. The economy and inflation are top priorities for voters and Harris and Trump have highlighted their different approaches if elected. White House Correspondent Laura Barrón-López reports on both candidates’ plans.
Amna Nawaz:
Today, in New Hampshire, Vice President Kamala Harris unveiled more of her economic plans, proposing tax breaks for new small businesses and a change to the capital gains tax.
Kamala Harris, Vice President of the United States (D) and U.S. Presidential Candidate: If you earn a million dollars a year or more, the tax rate on your long-term capital gains will be 28 percent under my plan, because we know, when the government encourages investment, it leads to broad-based economic growth and it creates jobs, which makes our economy stronger.
Amna Nawaz:
Now, that is a smaller increase on investment income tax than what President Biden has called for in his latest budget proposal.
The economy and inflation are top priorities for voters. And on the trail, Harris and former President Donald Trump have highlighted their different approaches if elected in November.
Our White House correspondent has been covering both candidates’ plans, and she joins us now.
Laura Barron-Lopez, always good to have you here.
So let’s start with Vice President Harris then. Just walk us through the key points in her economic plans that she says will lower costs for everyday Americans.
Laura Barron-Lopez:
So, in addition to the capital gains tax she proposed, today, she also announced that she wants to do a $50,000 tax deduction expenses for small businesses. That’s an increase in the tax break from $5,000 for start-ups.
She also has a goal of 25 million new business applications in her first term, were she to win. And this builds on other key proposals that she’s already outlined, outlined as early as last month of her economic proposals, that include the construction of three million new housing units, $25,000 down payment assistance for first-time homebuyers, a federal ban on price gouging food and groceries.
And she wants to raise the corporate tax rate from 21 percent to 28 percent. Amna, she also wants to permanently expand the child tax credit to $6,000 for middle- and low-income families for the first year of their child’s life. And she’s also made the promise that President Biden made, which was to not raise taxes on people making less than $400,000 a year.
So, ultimately, a lot of her proposals are very similar to President Biden’s.
Amna Nawaz:
What about when you compare them to former President Trump? How do they differ?
Laura Barron-Lopez:
Economic policy is not necessarily a regular part of Donald Trump’s stump speech, but Donald Trump has claimed that he plans to fix inflation on day one.
Donald Trump, Former President of the United States (R) and Current U.S. Presidential Candidate: On my first day back in the Oval Office, I will sign an executive order directing every Cabinet secretary and agency head to use every tool and authority at their disposal to defeat inflation and to bring consumer prices rapidly down.
It will be a whole-of-government effort to raise the standard of living and make American life affordable again.
Laura Barron-Lopez:
Donald Trump has provided little specifics on how exactly he would lower inflation, but here’s what we do know about his economic policy.
He said that he wants to cut taxes for corporations, lowering the rate from 21 percent to 15 percent, eliminate taxes on tips and Social Security benefits, institute a 10 to 20 percent tariffs on all foreign goods, with an extra focus on China, imposing tariffs of 60 percent on Chinese imports. And he wants to make those 2017 tax cuts permanent, Amna
Those 2017 tax cuts, which saw the corporate rate be implemented at 20 — tax cut be implemented at 21 percent and individual tax cuts across all earners, especially top earners, those tax cuts are going to expire next year, so he wants to make them permanent.
Amna Nawaz:
So, when you take a step back here, big picture, when you compare what we see as the Harris vision and the Trump vision, what are the key differences here?
Laura Barron-Lopez:
The biggest differences are on their housing, taxes, tariffs, and mass deportation of migrants proposals when it comes to how it will impact the economy.
My producer Shrai Popat and I spoke to multiple economists, including Mark Zandi, who’s the chief economist at Moody’s. And Zandi joked that you put 10 economists in a room and they will come out with 20 opinions, but, overall, he cited warnings from 16 Nobel laureate economists saying that Trump’s plans would increase inflation. And that’s also what Moody’s found.
MARK ZANDI, Chief Economist, Moody’s Analytics:
I think President Trump’s policies would lead to a somewhat diminished economy, not a recession, but a diminished economy, slower growth, higher — somewhat higher unemployment, but ultimately higher inflation and higher deficits and debt.
And if you’re a high-income household, a high net worth household, you will certainly do better under President Trump. But I think if you’re kind of a middle-income American, you’re a lower-income American, you will do better under President Harris.
Laura Barron-Lopez:
One of the similarities, Mark Zandi said, is that proposal to eliminate taxes on tips that both have said they want to do. But a lot of the economists say that people who necessarily rely on tips for their well-being don’t pay that much in taxes to begin with. So they question the impact.
And, overall, the attitudes of the two candidates are very different on the economy, Amna, Trump’s campaign arguing that his is about a less globalized approach and that he wants to promote investment. Harris is much more focused on the middle class, specifically parents and housing.
Amna Nawaz:
So, as you talk to the experts and they look at both sets of policy proposals, what do they say could be the biggest impacts of those proposals?
Laura Barron-Lopez:
One of the proposals that multiple economists raise was Trump’s plan for mass deportations of millions of undocumented migrants.
J.D. Vance, his running mate, has said that plan is their housing plan, that, ultimately, U.S. citizens are fighting for housing with U.S. migrants and that deporting millions of migrants could make housing more affordable.
We spoke to Michael Strain, who is an economist at the conservative American Enterprise Institute, and he said that that proposal would be detrimental to the economy.
MICHAEL STRAIN, American Enterprise Institute:
What that would do would be to remove hundreds of thousands, maybe even more, undocumented workers from workplaces. When you walk into the grocery store, the price of fresh produce would go up.
The price of a renting hotel room would go up. The price of a restaurant meal would go up, maybe the price of home construction.
Laura Barron-Lopez:
Strain said ultimately the way to fix the housing crisis is to build more homes.
But, also, when it comes to impacts, Amna, the nonpartisan Penn Wharton Budget Model conducted an analysis of both the candidates’ proposals and found that Trump’s proposals increase the national debt more than $5 trillion over 10 years. By comparison, Harris’ plan would add over $1 trillion over the same amount of time.
Amna Nawaz:
And what about when you talk to voters? This is the number one issue for them. What do they think about these plans?
Laura Barron-Lopez:
This is consistently, as you said, Amna, the top issue for voters across the spectrum. A new NBC poll out today found that Gen Z voters, 18-to-29-year-olds, say that inflation and cost of living is their top issue.
And we spoke to a number of voters in states like Pennsylvania and Wisconsin. Robert Nix (ph), who voted for Trump in 2016 and 2020, said that he feels like Trump just says whatever people want to hear, and he doesn’t like Trump’s proposal on tariffs.
We also spoke to Ethan Lentz (ph), who voted for Trump in 2020, but is disenchanted with him now and said he’s not a fan of necessarily either candidates’ policies, and feels that Trump’s are too vague, while Harris’ price gouging is something that he’s — price gouging, federal ban on that is something that he’s skeptical about, Amna.
Amna Nawaz:
All right, Laura Barron-Lopez with a look at both candidates’ proposals here.
Laura, great reporting. Thank you.
Laura Barron-Lopez:
Thank you.