It was three days ago that Kamala Harris unveiled her much anticipated plan for the economy. There are five components in it:
1. Increasing the child-tax credit to $6,000 for the first year of a child's life.
2. A federal price gouging ban on food and groceries.
3. Incentivizing new-home construction with a target of three million new units over four years.
4. Give first-time home buyers a $25,000 tax credit towards their downpayment.
5. Eliminate federal tax on tips.
With the exception of number 5, which was first proposed by Donal Trump, all are Harris's ideas and they reveal the thinking of a campaign that has identified what it feels will be a pivotal issue for voters this fall: the economy.
Already the Monday-morning quarterback brigade is in full attack mode. They're saying that Harris's plan is too ambitious and could conceivably drive away moderate and independent voters, thus handing the election to Trump.
To which I call bullshit.
If anything, the Harris plan isn't ambitious enough. Yep, you heard right. Mr. Play It Safe, Pragmatic Progressive is actually saying this plan doesn't go far enough. Now before you call for an intervention, let me explain.
Let's put aside, for the moment, whether any of this sees the light of day. That's for another discussion. The fact is there isn't one component in this plan that doesn't poll well with voters. The expansion of the child-tax credit would be of tremendous help to new parents. The data has been pretty clear for more than a decade that helping families with children is one of the best stimulants for a struggling economy since almost all of the benefits get redistributed back into the economy.
When it comes to a price gouging ban, I would've extended it to include every industry in the country, including fossil fuels. No other industry in the United States has been more profitable over the last three years than this industry. Without their greed, the average price for a gallon of gas would likely be 60 to 70 cents less than it currently is. Last year, when my wife bought a new car, the salesman at the dealership informed us that the sales price would be $1,000 more than the sticker price. That's $1,000 above, not below, sticker.
Imagine the sheer gall of looking right into a customer's eyes and telling them that not only are they not going to save any money on a new car, they're going to pay more for it. And it's not like my wife had any options. Every dealer out there was doing the same thing. I've been in sales for a quarter century and I've never seen anything like it. Millions of people have had similar experiences. Trust me when I say this, there's more support for this aspect of Harris's plan than you think. Every customer who's gotten screwed by this practice probably cheered when they heard the announcement.
As for the claim that this will lead to shortages and cause more inflation, the bozos peddling that drivel are the same ones that have been telling us for years that higher taxes on corporate America would kill the economy. Tell that to Bill Clinton. Taxes were much higher under his administration than Bush, Obama or Trump and yet GDP was at or over 4 percent for much of the last six years of his presidency. Rule number one: never trust a rich guy screaming poverty. They always cry crocodile tears.
Regarding new-home construction and first time buyers, again this is a winner. It is no secret that young people are being priced out of the housing market. Stimulating new construction while granting a $25,000 downpayment tax credit for first-time buyers will be a huge boon to the market and a tremendous help for potentially millions of people. It is well established that those who purchase a home are much more likely to remain in a neighborhood than those who simply rent. And homeowners pay property and school tax, whereas renters do not. How on Earth this isn't a slam dunk is beyond me. Yes it's true that not everybody can afford to own their own home, but those who can should get all the assistance we as a nation can give them. Think about it: we gave away a trillion dollars to billionaires and millionaires who didn't even need it. Is it really asking too much to give a fraction of that amount to people who are just trying to live out the American dream?
And last, but not least, tips. In some countries, waiters and waitresses get paid a living wage. But here in this country, these people live on their gratuities. Some do well, but most struggle to make ends meet. Allowing them to keep their tips tax free would not overly burden the treasury, and like the child tax credit, most of the additional money would get put back into the local economy. That's called trickle up economics.
There you have it: the Harris Plan for the economy. Pick it apart of you like, but consider this: with the exception of the elimination of federal taxes on tips, Trump has yet to come to the table with a viable plan for tackling higher prices, other than "drill, baby, drill," which he has been spewing for years. Spoiler alert: U.S. oil production reached an all-time high in 2023; so much so, that for the first time in decades, we exported more oil than we imported.
To help pay for her plan, Harris is proposing raising the corporate tax rate from the current 21 percent to 28 percent. That would still be seven percent lower than it was when Trump took office in 2017. And given that most corporations used that tax cut to buy back stock in their own companies, at least the money raised by increasing their tax rates will be put to good use.
Overall, I'd give Harris an A- for this plan. It addresses many of the concerns people have about pricing in a practical way, and it clearly puts the ball back in Trump's court.
And who said populism can't be popular?
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