Here’s what Harris and Trump are proposing for the economy
By Tami Luhby and Katie Lobosco, CNN
(CNN) — Former President Donald Trump and Vice President Kamala Harris have laid out a broad array of ideas aimed at making life more affordable and strengthening the economy, which rank at the top of voters’ concerns.
Nearly all of the measures on their differing wish lists, which lack detail, would require congressional approval. That could be tough to achieve in the current partisan climate on Capitol Hill.
One issue that hasn’t been high on the candidates’ priority lists is reducing the ever-growing national debt. Both Trump and Harris have rolled out pricey provisions without specifying how they would cover the cost.
Harris’ plan would boost the debt by $3.5 trillion over the next decade, while Trump’s platform would cause it to spike by $7.5 trillion, according to a recent report from the Committee for a Responsible Federal Budget.
Meanwhile, 23 US winners of the Nobel Prize for economics favor Harris’ agenda, calling it “vastly superior” to Trump’s platform in a recent letter.
Here’s what you need to know about how Harris and Trump would address the economy:
Tackle expiring tax cuts
Some parts of the 2017 Tax Cuts and Jobs Act, one of Trump’s signature achievements during his time in the White House, are scheduled to lapse at the end of 2025 – and Trump and Harris have differing views on how to address the expirations, which include cuts to individual income taxes and the estate tax.
While the law reduced taxes for most people, Democrats often criticize the TCJA for disproportionately benefiting the wealthy.
Harris: The vice president has said that she will continue President Joe Biden’s pledge not to raise taxes on anyone making under $400,000 a year – which would mean extending some of the individual tax cuts. But she will push Congress to roll back tax cuts for the richest Americans, according to her policy paper.
The vice president is also proposing some additional tax hikes on wealthy Americans. She has said she would raise the long-term capital gains tax rate to 28%, up from the current 20%, for those who earn $1 million or more. Like Biden, Harris has expressed support for what is often called a billionaire minimum tax – which would impact those whose net worth is more than $100 million, or less than 1% of taxpayers.
Most of the corporate tax provisions included in the 2017 law are permanent, but Harris is also proposing an increase to the corporate tax rate from 21% to 28%.
Trump: The former president wants to extend all the individual income and estate tax cuts that the 2017 law provided. This includes, among other things, an increase to the standard deduction, lower marginal income tax rates for most income brackets and an increase to the estate tax exemption.
Trump has suggested he would get rid of the cap on state and local tax deductions, known as SALT. The TCJA limited the deduction to $10,000, but the controversial cap expires at the end of 2025.
Additionally, Trump has called for lowering the corporate tax rate to 15% for certain companies. The TJCA permanently lowered the top corporate tax rate from 35% to 21%.
Trump would also restore companies’ ability to immediately deduct investments in equipment and research.
Eliminate taxes
Harris: The vice president has promised to end federal income taxes on tips in an effort to woo hospitality and service workers in key battleground states like Nevada.
Tips would remain subject to payroll taxes under Harris’ plan, and her campaign said she would work with Congress on a proposal that would set income limits and include measures to prevent fraud.
However, many tipped workers would not benefit from eliminating federal income taxes on tips since they don’t earn enough to pay income tax, according to the Budget Lab at Yale University.
Trump: The former president has rolled out a series of targeted tax breaks, including eliminating federal taxes on tips, Social Security benefits and overtime pay.
Trump was the first candidate to promise an end to taxes on tips, floating it at a rally in Las Vegas about two months earlier than Harris. Though his campaign hasn’t released details on the proposal, Trump has indicated that he would eliminate both federal income taxes and payroll taxes, which fund Social Security and Medicare.
Virtually all tipped workers would get some tax relief if Trump also gets rid of payroll taxes on tips, the Tax Policy Center found. However, these workers would then get smaller Social Security payments after they retire.
Seeking to appeal to senior citizens, a dedicated voting bloc, Trump has vowed that Social Security recipients would no longer have to pay taxes on the monthly benefits they receive. Around half of beneficiaries – mainly those with higher incomes – pay federal income tax on their Social Security payments.
In addition, Trump has proposed jettisoning taxes on overtime pay, though his campaign has not provided any details. However, if workers don’t owe payroll taxes on their overtime compensation, they could receive less from Social Security in retirement.
If enacted, all three of these measures could reduce the taxes that help fund Social Security, which could deplete the program’s trust funds by 2031 and force a roughly 30% cut in benefits for enrollees if the revenue is not replaced, according to the Committee for a Responsible Federal Budget.
Help the middle class
Harris: The vice president has promised to provide tax relief to 100 million Americans, particularly those in the middle class. Her plan centers on reviving or extending several temporary measures that Biden and congressional Democrats enacted.
Harris’ proposal would restore the American Rescue Plan’s popular expansion of the child tax credit to as much as $3,600, up from $2,000, per child and call for it to be made permanent. The enhancement was only in effect in 2021.
Plus, she would add a new child tax credit of up to $6,000 for middle-class and lower-income families with children in their first year of life.
Her plan would also restore the American Rescue Plan’s enhancement of the earned income tax credit, known as the EITC, which increased the maximum credit for workers without dependent children to roughly $1,500 – but only for 2021.
Harris has also talked a lot about strengthening the care economy.
To assist Medicare enrollees who can no longer live fully independently at home, Harris has proposed having the program pay for home health aides, who would help with activities of daily living, such as eating and bathing. This measure would also provide some relief to those in the “sandwich generation,” who have to care for aging parents and children at the same time.
Medicare would cover the tab for those with modest incomes, while seniors with higher incomes would share in the cost, according to the campaign. In addition, Harris is proposing that Medicare cover hearing aids and exams, eye exams, and new glasses and lenses.
To offset the cost, the vice president said she would expand Medicare drug price negotiations, as well as increase drug discounts from manufacturers, implement international tax reform and take other measures.
On the campaign trail, the vice president has said that families should not have to pay more than 7% of their income toward child care but did not provide a proposal on how to achieve that goal.
Harris has also voiced support for raising the federal minimum wage to at least $15 an hour, though she added that Congress would have to approve any increase.
Trump: The former president unveiled on the campaign trail several measures aimed at helping Americans afford the cost of living.
He has said he would temporarily cap credit card interest rates at around 10%, which is less than half the current rate.
And Trump promised to make the interest paid on car loans fully tax deductible, similar to the popular existing deduction for mortgage interest. While he argues this will stimulate car ownership, some experts say it will mainly help wealthier Americans who itemize their deductions – and who typically buy more expensive cars.
To assist aging seniors, Trump would shift resources to at-home care, end disincentives that lead to care worker shortages and support unpaid family caregiving through tax breaks and less red tape, according to his platform.
GOP vice presidential candidate Sen. JD Vance has floated beefing up the child tax credit to $5,000 per child, but Trump has not formally adopted that idea.
Boost tariffs and trade
Harris: The vice president hasn’t specified whether she would add any new tariffs if elected, but the Biden-Harris administration has kept most of the tariffs Trump imposed when he was in office and increased the rate of some of the duties.
But the vice president has criticized Trump’s new plan for across-the-board tariffs, which many studies show would result in in higher prices for US consumers. She’s referred to her opponent’s proposal as a “Trump Tax.”
Harris has also suggested she would want to make changes to the US-Mexico-Canada Agreement, known as USMCA, which Trump negotiated when in office. She was one of 10 US senators who voted against USMCA at the time and recently said that “it was not sufficient to protect our country and its workers.”
Trump: The former president has said that, if elected again, he will impose an across-the-board tariff of either 10% or 20% on every import coming into the US, as well as a tariff upward of 60% on all Chinese imports.
He’s also floated a 100% or 200% tariff on cars made in Mexico or on the products made by companies that move manufacturing from the US to Mexico.
Trump claims that tariffs will boost American manufacturing, create jobs and bring in billions of dollars to help pay for other policy initiatives – like tax cuts.
But it’s unlikely the revenue generated from new tariffs would fully cover his spending proposals. The duties would also likely raise prices on American consumers. Trump, for years, has inaccurately claimed that foreign countries pay the tariffs. They are paid by importers based in the US.
Separately, Trump has said he will renegotiate the USMCA trade deal his own administration struck with Mexico and Canada.
Cut prices
Harris: The vice president has acknowledged that prices – particularly for groceries – have remained high even as the rate of inflation has ebbed. She argues there are some bad players that are looking to pad their profits even though their production costs have leveled off.
One of the main ways she intends to address the issue is by instituting a first-ever national price-gouging ban on food and groceries. The ban would be aimed at big corporations that unfairly exploit consumers during crises and emergencies to increase their profits. A policy paper from her campaign noted that Harris’ idea is similar to price-gouging bans already in place in 37 states, including Texas and Florida.
Trump: The former president has repeatedly blasted Harris for the surge in prices in recent years. He has promised to reverse course and lower the prices of gas, groceries and other essentials, though he hasn’t provided many details on how he’d accomplish that.
Trump has repeatedly said he will bring down prices by boosting oil and gas production. He’s vowed to allow for more drilling and reduce regulations. But those efforts may have a limited effect on prices at the pump, which in the US are highly dependent on the global oil market.
Trump has also promised to rescind unspent funds under the Inflation Reduction Act, a milestone climate law backed by the Biden-Harris administration, as well as create a new efficiency commission to conduct a financial and performance audit of the federal government. He said in September that tech billionaire Elon Musk has agreed to lead the commission.
Make housing more affordable
Harris: The vice president has a three-section plan aimed at addressing the nation’s housing shortage, parts of which build on proposals that Biden has already unveiled.
Among the key provisions are providing up to $25,000 in down-payment support and a $10,000 tax credit for first-time homebuyers. The plan would allow for more than 1 million first-time buyers per year, including first-generation homebuyers, to access the funds, according to her campaign.
Harris is also calling for the building of 3 million new housing units. To spur construction, she would provide a first-ever tax incentive for builders who build starter homes sold to first-time buyers. She also would expand an existing tax incentive for building affordable rental housing.
The plan also highlights two main proposals that aim to lower rent. The first would block landlords from using algorithm-driven, price-setting tools to set rents. The second would discourage wealthy investors from buying up properties and marking up rents in bulk by removing tax benefits for investors who buy large numbers of single-family rental homes.
Trump: The former president has not rolled out a formal housing proposal but has talked on the campaign trail about ways he’d help homeowners.
Trump has promised to make housing more affordable and boost supply by getting rid of regulations that increase costs and by opening up some federal land available for large-scale housing construction.
He has also said falling interest rates will send mortgage rates down to 3% or even lower, which will make financing less expensive for homebuyers. (However, presidents don’t control interest rates.)
Trump has also blamed undocumented immigrants for driving up the cost of housing, which he would address through mass deportations and by banning them from getting mortgages.
The platform of the Republican Party also notes that it would “promote homeownership through Tax Incentives and support for first-time buyers.”
Invest in US businesses
Harris: The vice president has called for a number of proposals to help small businesses and boost manufacturing.
She wants to increase a tax deduction for startup expenses from $5,000 to $50,0000 and make it easier for small business owners to file taxes and do business across state lines. The vice president has also said she would ensure that one-third of federal contract dollars goes to small businesses.
Harris said she would invest in community development financial institutions, or CDFIs, so that they can provide low- and no-interest loans to small businesses serving low-income communities that want to expand.
Additionally, Harris has called for a new tax credit for American manufacturers. Harris’ policy paper gives few details about the tax credit, which she’s calling “America Forward,” but says it will target key strategic industries and mentions steel and iron, biotechnology, artificial intelligence, semiconductors, aerospace, autos and farming. The policy paper said the tax credit will prioritize companies that protect workers’ rights to organize and investments in long-standing factory towns.
She also plans to expand apprenticeship programs to help workers get jobs without having to get a four-year degree. Relatedly, she said she backs eliminating degree requirements and increasing skills-based hiring.
Trump: The former president has said that his plans to increase tariffs and cut the corporate tax rate will result in a boom in American manufacturing.
He has said he will impose tariffs on companies that move manufacturing from the US to another country and, in September, specifically threatened John Deere with tariffs if the company doesn’t abandon plans to move some production from the Midwest to Mexico.
The idea is that tariffs will make foreign-made goods more expensive compared with those made in the US. But prices can go up for US manufactures too if they need to import certain parts. And there will likely be retaliatory tariffs imposed by other countries, making it harder for US companies to sell goods abroad. In 2019, Federal Reserve economists found that Trump’s earlier tariffs led to a net decrease in manufacturing employment.
In September, he called his proposal to reduce the corporate tax rate to 15% for companies that make products in the US the “centerpiece” of his plan for a manufacturing renaissance.
Make health care more affordable
Harris: The vice president has unveiled several proposals that are largely in line with steps taken by the Biden administration.
They include extending the more generous Affordable Care Act premium subsidies that are set to expire at the end of 2025. The enhancement, which was made available through the American Rescue Plan and extended by the Inflation Reduction Act, has helped push sign-ups for Obamacare coverage to record levels.
Also, Harris wants to expand the current $35 monthly cap on out-of-pocket costs for insulin and the upcoming $2,000 annual limit on out-of-pocket costs for Part D prescription drugs to all Americans, not just Medicare enrollees. These caps were put in place for those on Medicare by the Inflation Reduction Act.
Harris’ plan would also accelerate the speed of Medicare’s drug price negotiations so that the costs of more medications come down faster. The Biden administration announced in August the results of the first-ever round of negotiations, which is expected to result in $6 billion in savings for Medicare and a $1.5 billion reduction in out-of-pocket costs for seniors when the lower prices take effect in 2026. Medicare gained this historic power through the Inflation Reduction Act.
Also, as part of her efforts to help rural communities, Harris would recruit 10,000 health care professionals by expanding scholarships, loan forgiveness and other programs for doctors and nurses who will work in rural and tribal areas. In addition, she would launch a new grant program to train and fund community health workers in rural areas and expand grants to community and rural health centers.
Plus, she wants to reduce the number of “ambulance deserts” by increasing funding and technical support for emergency medical technicians and first responders, as well as providing more resources for ambulances, lifesaving equipment and first-responder stations. And Harris would give grants to volunteer ambulance programs.
Trump: While health care was a main focus of Trump’s first term – when he unsuccessfully tried to repeal the Affordable Care Act and issued multiple executive orders and proposals aimed at reducing drug prices – the former president is not placing the same emphasis on the issue during this campaign.
He has alternated between saying he would like to try again to repeal Obamacare and replace it with a better program. When pressed at a September debate, Trump said he had “concepts of a plan.”
Vance sought to fill in some of the details at rallies last month. After initially indicating support for separating healthy and sicker Obamacare enrollees into different risk pools, which could threaten the law’s protections for those with preexisting conditions, he later backed off that view. In an October debate, he said he supports federal approval of state reinsurance programs, which have generally lowered Obamacare premiums by providing funding for insurers that enroll many high-cost patients.
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