What Kamala Harris’s Economic Plan Could Mean for Your Future

Detailing the key components and potential impact of her economic plan and what it could mean for the future

Fact checked by Vikki VelasquezReviewed by Samantha SilbersteinFact checked by Vikki VelasquezReviewed by Samantha Silberstein

Vice president and presidential candidate Kamala Harris’s economic plan includes policies aimed at lowering the cost of living for middle- and working-class families, creating opportunities for economic growth in underserved communities, supporting social service programs, and more.

However, while Harris’s plans overlap with aspects of Bidenomics, there are also key differences.

Key Takeaways

• Kamala Harris’s economic plan includes revising the tax code, lowering the cost of living, and addressing income inequality.
• Harris’s economic plan aims to support middle—and working-class families, focus on job creation, and increase economic growth overall.
• The presidential candidate originally faced criticism for a lack of clarity around her specific plans.

Key Components of Kamala Harris’s Economic Plan

The Harris-Walz campaign says it’s focus is “building up the middle class.” Harris has said she will cut taxes, lower costs for everyday items, create jobs, and grow the economy. She has also said “I am a capitalist. I believe in free and fair markets.”

Cost of Housing

Lowering the cost of housing—an issue that is top of mind for many Americans as home prices reach a record high—is a key component of the Kamala Harris plan.

Her campaign has called for the construction of 3 million new housing units to ease the housing supply shortage across the country. The presidential candidate also plans to implement a tax incentive for homebuilders who build starter homes that are sold to first-time homebuyers, and to propose a new $40 billion innovation fund to support local governments in finding solutions to housing shortages. Her agenda also mentions taking action to make certain federal lands eligible to be repurposed for affordable housing.

Harris also said she would provide $25,000 in downpayment support for all eligible first-time homeowners while ensuring full participation by first-generation home buyers and a $10,000 tax credit for first-time home buyers.

The Harris-Walz administration said it would call on Congress to pass two bills related to renting. The first is the Stop Predatory Investing Act, a bill introduced in 2023, which would remove tax benefits for investors owning 50 or more single-family homes to rent, and the second is the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, a bill introduced in 2024 to crack down on companies inflating rental prices.

Harris’s plan also includes lowering the cost of prescription drugs and the burden of medical debt. The presidential candidate said she would do this by capping the cost of insulin at $35 and out-of-pocket expenses for prescription drugs at $2,000. She also said she would allow Medicare to speed up negotiations so drug prices can come down faster and to work to stop pharmaceutical companies from blocking competition. Building on her work as vice president, the candidate said she plans to work with states to cancel medical debt for millions of people.

Harris also proposed a ban on price gouging from grocery chains and an end to taxes on tips.

The Harris-Walz campaign relesed its policy website “A New Way Forward” in September 2024.

Investments in Community Development Financial Institutions (CDFIs)

During her vice presidency, Harris has supported providing access to capital in underserved communities. In 2022, she formed the Economic Opportunity Coalition (EOC) to help minority, rural, and low-income communities develop small businesses. The move was an expansion of Harris’s support of community development financial institutions (CDFIs), institutions that provide funds to support economic growth in rural and low-income parts of the country.

In April 2023, Harris and the U.S. Treasury Department announced that the fund had awarded more than $1.73 billion in grants to CDFIs.

At the 2024 Freedman’s Bank Summer Symposium, the Biden-Harris administration announced that the EOC had plans to commit $3 billion in corporate deposits to CDFIs by 2025. The administration also highlighted that the Emergency Capital Investment Program (ECIP)—a program that the vice president helped pass when she was a senator to support financial institutions in lending to underserved communities—had invested $8.57 billion into community financial institutions to support small businesses and consumers who were negatively impacted by the COVID-19 pandemic.

Impact on Middle- and Working-Class Families

Harris’s proposals to lower the cost of living—including her plans to decrease housing and grocery prices—are aimed at helping the middle and working class.

“Costs are still too high. And on a deeper level, for too many people, no matter how much they work, it feels so hard to just be able to get ahead,” the candidate said in a speech delivered on the campaign trail in North Carolina in August. “As president, I will be laser-focused on creating opportunities for the middle class that advance their economic security, stability and dignity.”

Harris has proposed more tax relief, including an expansion of the Child Tax Credit that would provide a $6,000 tax cut to families with newborn children and restoring the American Rescue Plan’s expanded Child Tax Credit of up to $3,600 per child tax credit for middle-class and working families.

The Harris-Walz administration said it would also expand the Earned Income Tax Credit, which helps workers with low and moderate incomes by reducing their tax burden. Harris’s plan includes cutting taxes to make health insurance on the Affordable Care Act Marketplace.

Job Creation and Economic Growth

Job creation and economic growth have been in the spotlight recently following years of high inflation, interest rate hikes, and continuous concern about a potential recession.

Note

At the Democratic National Convention in Chicago in August, Harris talked about creating an “opportunity economy” in which everyone has the chance to compete and succeed.

“As president, I will bring together labor and workers and small business owners and entrepreneurs and American companies to create jobs, to grow our economy and to lower the cost of everyday needs,” Harris said.

Harris recently proposed a $50,000 tax deduction for new small businesses, which would be above the $5,000 break currently offered. Her campaign set a goal of encouraging 25 million new small business applications in the first two years of her potential presidential term.

Many of her proposals regarding economic growth revolve around her plans to lower the cost of housing, groceries, and other essentials and provide access to capital to small business owners. Her plans for these proposals have been more detailed than her proposals for job creation.

Addressing Income Inequality

Harris’s economic plan includes proposals aimed at bringing down costs for lower-income Americans and cracking down on what she calls predatory practices by large corporations and investors. Her proposed ban on price gouging, for example, would make groceries more affordable for everyday Americans while curbing profits for retail giants.

The democratic candidate says in her first 100 days in office as president she would encourage Congress to pass a national ban on price gouging for food, give the Federal Trade Commission and prosecutors authority to pursue “bad actors” who violate that order, and examine big grocery chain mergers.

Her proposals around housing affordability include lowering rental costs and discouraging real estate investors from buying up and renting out single-family homes by cutting their tax incentives.

The vice president’s proposed “opportunity economy” focuses on economic fairness: She has said that part of this plan would be ensuring every American has economic security. Her push for providing financing for underserved communities could also help break down income inequality, since it would enable more people in rural and low-income communities to start businesses.

In a continuation of the work of the Biden-Harris administration, the candidate has also pushed for the protection of social safety programs, including Social Security and Medicare.

Criticisms and Challenges

One of Harris’s challenges is outlining a clear vision for the future that both builds on Biden’s presidency but isn’t solely defined by it. Harris has also faced some criticism that her background as a prosecutor has made it difficult for her to hone that vision.

Important

Prior to becoming a senator, Kamala Harris was attorney general of California.

Harris has also garnered pushback for her proposal to ban price gouging at the grocery store. Economist Carl Schramm, a professor at Syracuse, characterized such a proposal as “price controls,” Investopedia previously reported. “The real issue with price controls is who you drive out in the market,” he said. “If you put price controls on housing, no investor is going to build houses to rent.”

Harris, like her rival Trump, has also proposed ending income taxes on tips—a move some economists say would reach a very small percentage of the workforce and lowest paid, and could encourage other professions to replace wages with tips.

Background of Kamala Harris’s Economic Priorities

Before Kamala Harris was vice president, she was as a senator from California. In 2018, Harris introduced the LIFT (Livable Incomes for Families Today) the Middle Class Act, which would have created a $3,000 per year tax credit for individuals and $6,000 for married couples, benefitting lower-income earners via the tax code.

During her 2020 presidential run, Harris said that if she became president, she would repeal the Tax Cuts and Jobs Act (TCJA) passed by Donald Trump that implemented broad tax cuts for both high-income individuals and corporations.

As vice president, Harris supported Biden in his attempts to reinvigorate the economy following the COVID-19 pandemic. The American Rescue Plan, which passed in March of 2021, included $1,400 stimulus checks and extended unemployment benefits. The administration also fought to protect and expand on the Affordable Care Act, empowering Medicare to debate drug prices and making health care plans more affordable.

The Biden-Harris administration forgave up to $20,000 in student loan debt for borrowers whose income is less than $125,000 and who were Pell Grant recipients and up to $10,000 for those who were not Pell Grant recipients. It attempted to forgive more than $430 billion in student loan debts in 2023 and implement an income-driven repayment plan called Saving on a Valuable Education (SAVE) Plan, though both attempts were blocked.

Biden and Harris also passed the CHIPS and Science Act, which invested in domestic semiconductor manufacturing and research, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act.

Warning

Harris previously proposed a Medicare For All plan funded through taxes on financial transactions, including a 0.2% tax on stock trades and a 0.1% tax on bond trades. But in August 2024, a campaign official said Medicare for All is no longer on Harris’s agenda.

What Has Kamala Harris Accomplished as Vice President?

As vice president, Harris launched Central America Forward (CAF) to invest northern Central America and create jobs to slow migration. In March of 2024, she announced CAF had generated more than $5.2 billion since May 2021. She has also been active in protecting voting rights, reproductive freedom, and maternal health, and oversees the White House’s first-ever Office of Gun Violence Protection.

What Would be Kamala Harris’s Priority if Elected?

Harris’s top priorities include lowering the costs of living for everyday Americans, cracking down on corporations that are increasing those costs, and creating economic opportunities in underserved communities. Many aspects of her plan include expansions of the work her and Biden have overseen during their administration.

How Do Trump and Harris Compare on Economic Policy?

When he was president, Donald Trump’s economic policies were mainly characterized by tax cuts, trade wars and tariffs, deregulation, and restrictions on immigration. The TCJA—which includes many reforms that expire in 2025—lowered taxes for both individuals and corporations, while his tariffs and trade war with China are also among the best-known aspects of his policy. There are not many details on what a second Trump term would look like, but the former president has signaled the U.S. could expect more tariffs and tax cuts.

How Would Kamala Harris’s Agenda Differ From Biden’s if Elected?

Harris’s call to repeal the TCJA differs from what Biden has said about the act. Instead of calling for a complete repeal, Biden has said that he would extend tax breaks past their expiration in 2025, but only for those earning under $400,000. Overall, many of Harris’s economic proposals don’t look starkly different from Biden’s.

What’s Kamala Harris’s Position on on Student Loan Debt and Medical Debt Forgiveness?

Student debt forgiveness has been a top priority of the Biden-Harris administration. In April 2024, Biden forgave $7.4 billion for 277,000 borrowers and $1.2 billion for 35,000 additional borrowers in July 2024. Harris is expected to continue this trend should she become president.

In June 2024, the vice president announced a new proposal alongside the Consumer Financial Protection Bureau (CFPB) that would eliminate medical debt from 15 million Americans’ credit reports. Her economic plan also includes canceling medical debts for millions of people.

The Bottom Line

Amid the 2024 presidential campaign, Harris’s positions include lowering the cost of living with proposals like a ban on price gouging at the grocery store and removal of tax benefits for investors renting many single-family homes. The candidate also plans to provide $25,000 in downpayment support for first-time homeowners and work to increase the housing supply. She’s proposed ending taxes on tips, and furthering her accomplishments as vice president by lowering the cost for prescription drugs and the burden of medical debt and expanding the Child Tax Credit.

Read the original article on Investopedia.