The economy looms large over next month’s presidential election as tens of millions of Americans begin casting their votes.
Employers are hiring and inflation is fading but consumers are still counting the cost of years of soaring prices. Polls show voters of all persuasions remain unhappy about the state of the economy.
Kamala Harris and Donald Trump have laid out plans they say will transform the world’s largest economy – and tackle voters’ concerns. Come 5 November, those plans are likely to have played a large part in who will win the White House. So where do the two candidates stand on the key economic issues?
Taxes
The US-vice president has pledged to expand the child tax credit, including a $6,000 credit for new parents. She has also pledged expanding earned income tax credit for lower-income workers who are not raising children at home.
While Harris has promised that no one earning less than $400,000 would pay “a penny” more in taxes under her plan, for Americans earning over $1m a year, the tax rate on long-term capital gains would increase from 20% to 28%.
Tax cuts introduced under Trump in 2017 are due to expire at the end of next year. He has pledged to “make permanent” some of the measures in the legislation, including a higher standard deduction for taxpayers and a child tax credit boost.
Both candidates have pledged to end taxes on tips. Trump has also signaled his support for eliminating taxes on overtime pay, and argued that seniors should not pay tax on social security benefits.
The Tax Foundation estimates Trump’s proposals will add $3tn to the 10-year budget deficit. The thinktank estimates that the net effect of Harris’s policies would increase deficits by $2.3tn over the next decade.
Cost of living
Harris has pledged to call on Congress to introduce a federal ban on price gouging. Her administration would also crack down on “unfair” corporate mergers and takeovers that consolidate power within the food industry.
Trump, meanwhile, has pledged to end “market-distorting” restrictions on oil, natural gas and coal – a move his campaign has claimed would lower fuel and energy prices by boosting production. The proposal has prompted widespread criticism from climate experts and campaigners.
Both candidates have pledged to reduce healthcare costs. Harris has proposed making permanent tax credit enhancements under the Affordable Care Act, and extending a $35 cap on insulin. Trump has promised wider access to affordable healthcare and prescription drugs, without providing much detail.
Business
Under Harris, the federal corporate tax rate would rise from 21% to 28% – part of a strategy she says would make firms “pay their fair share”. An excise tax on stock buybacks by publicly traded corporations, currently set at 1%, would be quadrupled.
During Trump’s first term, the corporate tax rate was cut from 35% to 21%. Now he wants to reduce it further, to 15% for companies that manufacture their products in the US, in a bid to boost America’s industrial heartlands.
Harris has also pledged to expand the start-up expense tax deduction from $5,000 to $50,000 and has set a target of 25m new business applications in four years.
Trump promised to end an “unAmerican” crackdown on cryptocurrencies, repeal artificial intelligence regulations brought in under Joe Biden, and “create a robust Manufacturing Industry in Near Earth Orbit” in a bid to encourage innovation.
Trade
“Tariffs” is the “most beautiful word in the dictionary”, Trump has said on the campaign trail. A baseline levy of 10% on all foreign imports is at the heart of the former president’s plan to reduce the US trade deficit. While he has pledged to bring down prices, economists say this risks increasing them.
Trump is also threatening to impose higher tariffs on China, and has pledged to ban companies that outsource jobs overseas from doing business with the federal government.
Harris has pledged to stand up for American businesses that are “threatened” by unfair trade practices, citing areas including shipbuilding, electric vehicles and intellectual property. While Trump has made clear he plans to shake up the global economic system, Harris “believes in upholding and strengthening international economic rules and norms that protect fair trade and create predictability and stability”, according to a policy book released by her campaign.
Labor
Harris pledged to sign “landmark pro-union legislation” including the Protecting the Right to Organize Act, which is designed to protect workers’ rights to form unions, and the Public Service Freedom to Negotiate Act, which would expand collective bargaining rights to all public sector workers.
A Harris administration would also “fight to raise the minimum wage” and “end the sub-minimum wage” for tipped workers and people with disabilities, according to her campaign.
Both campaigns have promised to spur job creation. Trump has pledged to do this by cutting regulations, although his policy platform did not provide details of which would be cut.
The former president has outlined plans for the “largest deportation program in American history”, claiming that immigrants are “taking your jobs”. Economists say that immigration has boosted the US economy, and warn that deporting millions of migrant workers – as Trump has outlined – would hit it hard.
Housing
The soaring cost of housing is a major campaign issue.
While Trump has pledged to “reduce mortgage rates by slashing inflation” to help Americans buy homes, he has been warned that some of his policies, such as tariffs, would stoke inflation. He has also suggested he would try to influence the Federal Reserve, the central bank responsible for setting interest rates, raising questions about its independence.
The former president has vowed to open up “limited portions” of federal land for homebuilding and provide unspecified tax incentives and support to first-time buyers.
Harris, meanwhile, has pledged to provide first-time buyers with $25,000 in down-payment assistance, and introduce a “significant” tax cut for homebuilders who construct properties sold to “working families”.
She has also committed to expand low-income housing tax credits for private and non-profit developers to build affordable rental housing, and create a neighborhood homes tax credit to support the new construction or rehabilitation of more than 400,000 owner-occupied homes in lower-income communities.
