The Harris campaign put forward an 82-page plan, A New Way Forward For the Middle Class, following numerous charges that she had no proposals. Let’s take a look.
In the introduction, she states, “It’s time to finally turn the page on Trump and chart a new way forward.” If you just came from Mars, you would think Donald Trump is the current president and that the Harris/Biden Administration has not been in charge the last four years. It is a nice try, but as the saying goes, no cigar. Any economic conditions where you seek to turn the page are in the hands of you and your prior running mate.
The next four pages talk about the folks who support her plan and prefer it to Mr. Trump’s. We are beginning to get a sense that the report will state: “I am wonderful, and Trump is stinky.”
The beginning of the actual financial plan finally begins on page 11, where Harris again besmirches herself in the first paragraph by attacking Trump. She says his “Project 2025 agenda would raise taxes on the middle class.” Let us repeat another time. Donald Trump and his people had nothing to do with Project 2025 and he has publicly disavowed the report stating he knows nothing about it. It is fascinating that a man, Trump, who his political opponents have characterized as never having read a book, actually read the 922-page Project 2025, and has adopted its policies. Maybe they believe Melania read it to him as bedtime stories.
Here is Mr. Trump’s economic plan in a succinct manner. How do we know what it is? Because he was president for four years, he enacted it, and it was successful. He wants to lower tax rates (including for the middle-class) so that people can spend their own money versus waiting for the government to give them money. The tax rate reductions will increase government revenues as people spending their own money stimulates the economy. He wants to take the yoke of governmental regulation of businesses and individuals so they can pursue more freely making a profit. A new feature is he wants to seriously dig into the web of governmental agencies because he believes there is tremendous overlap, and we can cut the deficit without lessening services to American citizens. And, last, he wants to massively increase the production of energy because the cost of energy is elemental to the cost of everything we buy. And he wants to do it without giving billions of dollars out for failed ideas. As part of that he wants to increase the production of oil and clean natural gas. He understands not only does it provide energy, but it is the basis for all the plastics we use on a daily basis which would drive down the cost of the products we buy. Trump does not need anybody telling him his economic plan.
The first proposal addressed by Harris is to increase the existing child-tax credit and provide a new credit for the first year of birth of $6,000. A portion of that credit is not a credit, but a welfare program as it is paid to the tax filer even if they owe no taxes. Any time there is a refundable credit (transfer payment), there has proven to be substantial fraud in the program. A like program, Earned Income Tax Credit (EITC), had $17.4 billion of fraud in 2018, and you can bet that it has grown. And sure enough, the next proposal is to expand EITC.
Harris’ plan hates tax rate reductions, but she loves to collect taxes and then parcel out those taxes in payments (not always tax reductions) to targeted taxpayers. That pretty well sums up her program right there. She ignores the historical incidents of fraud that have increased in the computerized era and will certainly (at some point) pledge to strengthen the enforcement against fraud. We have heard that tune before. Let’s move on to Chapter 2.
This is about lowering food and grocery costs. Her first proposal is to invest (that means spending your tax dollars) in diversifying the food supply chain. She wants to stop the big food suppliers from being able to merge (you know, the companies that have 1-2% profit margins). She will support small businesses by giving them subsidies and loans to compete in the food markets. That means handing out monies to pick winners and losers and then we foot the bill when they fail. She wants to pass a bill to stop price gouging. One would hope that is aimed at Apple and Microsoft, who have astronomical profit margins unlike the food companies that have meager ones. That law will be known as the “attorney’s full employment act” with meager benefits except for Big Law.
So far, we have only seen proposals in which the government controls business and hands money out to select individuals. And she calls herself a “capitalist.” Milton Friedman is laughing in his grave at that one.
Chapter three is about lowering health care costs. You know, the ones that have expanded tremendously since Obama promised to lower costs with the misnamed “Affordable Care Act.” We will not even waste time reading this since she was and is all in on Obamacare.
Last, we should address the proposal to deduct $50,000 in start-up expenses in the first year of a business. Start-up expenses are defined by the IRS as “a cost a business pays or incurs before the day their active trade or business begins.” These are usually seen as legal fees and other formation costs for an entity like an LLC, etc. In the report Harris states the average cost of starting a new business is $40,000 derived from a Shopify study. The problem is that if you read the Shopify report, those are not start-up expenses because it talks of expenses incurred in the first year of operation. Those are deductible as ordinary expenses. It appears that neither Harris nor the people who put together this plan understand their own justification for her proposal.
The existing limit for first year deductibility will suit most businesses. Because this level has not been raised for years, how about upping the limit to $10,000? Or a better idea is junking the whole idea of start-up expenses and allowing them all to be currently deductible. That would stimulate the economy. As presently constructed, this is another bogus proposal.
We could go on, but you get the point. Harris reverts in the conclusion to comparing her plan to the Left’s new bogeyman – Project 2025 – which I am sure neither she nor her staff has read. It is a classic dog whistle. It took her team 82 pages to explain her plan. Typically, in life, the longer the report the more dung they are throwing at you.
A summary in simple terms: Harris good, Orangeman bad. Here is my summary. Harris wants to run everything through a government program. Trump wants to run things through you. Her explanation took 82 pages; my one paragraph above explaining Trump’s economic program is all you need to understand what he wants to do. Your choice.