Kamal Harris, the Democratic candidate for president, shared significant economic initiatives for the first time on Friday, with experts offering mixed feedback on their potential benefits for average Americans.

Harris highlighted in her fact sheet her aim to tackle some pressing challenges faced by American families, proposing strategies to limit rent increases, cap prescription drug prices for everyone, enhance assistance for first-time homebuyers, end price gouging at grocery stores, and expand the child tax credit.

Her plans resonate with voters who have been affected by rising inflation over the past few years, yet some experts express concerns about what they perceive as “price controls” intended to combat elevated prices and question how her proposals would be funded. Adjustments to the tax system will also necessitate congressional approval and will be significantly influenced by the party that holds power in Congress, according to tax specialists.

“Her plans demonstrate an optimistic approach aimed at uplifting the middle class; however, specifics are still unclear, and the outcome of congressional elections will likely affect the chances of these initiatives being passed,” stated Mark Baran, managing director at consulting firm CBIZ MHM’s National Tax Office.

Rick Lazio, a former Republican congressman and senior vice president at tax consultancy Alliantgroup, remarked that the Harris campaign needs to consider “the societal implications of accumulating unsustainable public debt, its effects on inflation, and our ability to manage unexpected challenges like economic downturns, conflicts, pandemics, and natural calamities.”

The nonpartisan Committee for a Responsible Federal Budget predicts that Harris’s full plan could add $1.7 trillion to deficits over the next ten years, potentially reaching $2 trillion if temporary housing measures are made permanent. “The Harris campaign claims this would be financed through taxes on corporations and affluent individuals, supporting revenue increases in the President’s fiscal year 2025 budget but has yet to propose detailed offsets aimed at decreasing expenses for American families,” the committee mentioned in a statement.

To provide a clearer perspective on the proposals that gained favor among experts and those that raised eyebrows, YSL News has compiled an analysis of each initiative.

Child Tax Credit

• A revival of the child tax credit (CTC) policies from the COVID era, which provided $3,600 for eligible children under 6 and $3,000 for other qualifying children under 18.

The current CTC stands at $2,000 per qualifying child under 17, phasing out for single filers earning over $200,000 and married couples with incomes over $400,000. J.D. Vance, the Republican vice-presidential nominee, has proposed a $5,000 CTC without income restrictions.

• Introduces new, increased tax relief of up to $6,000 for families welcoming a newborn.

“We were thrilled to see her propose this major expansion,” noted Mary Nugent, a domestic policy advisor at Save the Children US. “By prioritizing this and including a new bonus for new parents with young children, the impact is truly exciting.”

According to her estimates, the plan could reduce child poverty by at least half. “Most families would experience an increased credit, leading to considerable drops in child poverty,” she asserted.

Health Care and Food Prices

• $35 price cap on insulin for Medicare participants and a $2,000 annual out-of-pocket cap for all Americans, extending beyond just seniors.
• Tighter regulations and rigorous antitrust actions to control rising drug and food prices for consumers.
• The introduction of the first-ever federal prohibition on price gouging for food and groceries.

The Groundwork Collaborative, a progressive nonprofit, praised Harris’s efforts to hold corporations accountable. “When a small number of large companies dominate the market, they have the capacity to inflate prices without concern for competition,” said Lindsay Owens, the executive director of the group, in a statement.

However, economists expressed skepticism, describing Harris’s initiatives as “price controls.”

“Harris continues the Biden administration’s narrative of attributing high inflation to corporate greed and price gouging—whether by oil producers, pharmaceutical companies, or grocers—rather than considering the impacts of overly relaxed fiscal and monetary policies implemented during the pandemic,” noted Paul Ashworth, chief North America economist at Capital Economics. “Proposing a federal ‘price-gouging’ ban raises concerns reminiscent of price controls, which might lead to product shortages.”

Housing

• Prevent data firms from raising lease prices and stop Wall Street investors from purchasing homes en masse to resell at higher prices.
• Offer new tax incentives for builders who focus on creating “starter homes.”
• Provide assistance of up to $25,000 for down payments to first-time homebuyers.

“I am heartened by Vice President Harris’s acknowledgment of the affordable housing crisis affecting America,” Lazio said. No congressional district in the nation Recently, there has been no noticeable increase in the housing supply imbalance. However, it’s important to dig deeper into the specifics. Some measures, such as offering subsidies for first-time homebuyers without considering their financial situations, may need reevaluation.

Ashworth also pointed out that many developed nations have attempted to enhance home construction but have faced challenges due to limited capacity in the construction sector and other obstacles, such as zoning laws.

What was overlooked?

• The Tax Cuts and Jobs Act, a significant tax reform enacted in 2017, is set to expire at the end of 2025. This legislation impacts nearly every American. If it lapses, many Americans will see higher tax rates, a reduction in income brackets, and the standard deduction could be cut by half, which might necessitate itemizing deductions once again, among other consequences.

Baran described this issue as the “big elephant in the room.” He warned that allowing it to completely expire would negatively affect middle-class Americans by increasing tax rates.

Ashworth also observed a lack of conversation regarding whether support for the extension of the original Trump tax cuts would continue, even for those making under $400,000 per year. The looming potential fiscal cliff at the end of next year represents a significant policy debate.

• No taxes on tipped wages was a commitment made by Harris during a rally in Nevada last weekend. Trump previously proposed similar ideas.

Ashworth remarked that while this might not be ideal economic policy, it makes sense politically, as it could sway votes in Nevada. If there are limits on how income from tips is calculated and only income taxes are eliminated while payroll taxes remain, this tax relief might amount to around $150 billion over the next decade.

• Small and medium enterprises.

Lazio expressed disappointment over the absence of mention of the need to support and encourage these businesses, which employ a significant portion of the American workforce and have historically driven much of the country’s industrial innovation. He suggested that Harris should advocate for tax incentives for research and development to promote innovation while maintaining stable tax rates for small businesses.

“Small business owners are part of the middle class too,” Baran added.