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    • How Trump and Harris differ on taxes, spending, inflation and tariffs
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    How Trump and Harris differ on taxes, spending, inflation and tariffs

    Caradoc Wyn Posted on

    Donald Trump and Kamala Harris offer different plans for the economy, taxes, spending and more. Here are some of the differences and what voters see as the most concerning financial issues.

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    As the presidential campaign enters the home stretch, the candidates and their proposals are subject to constant scrutiny. Inflation has emerged as a top economic concern among voters, but taxes, tariffs and other issues also play an important role, as does the impact of policies on the national debt.

    Research groups, pollsters and others continue to provide new insights and opinions. Here are a few that could impact your personal finances:

    How could the candidates increase the national debt?

    Fiscal restraints don’t appear to be a priority for either presidential candidate, but measures proposed by former President Trump could put the national debt more in the red compared to those favored by Vice President Harris.

    The Committee for a Responsible Federal Budget said it analyzed each major policy proposal from the two candidates under various scenarios. Harris’ proposals would add $3.5 trillion to the national debt by fiscal year 2035, while Trump would add $7.5 trillion, according to the group’s central or main estimate. The group evaluated both candidates on debt-reducing measures, such as increasing tax revenues, and debt-increasing measures, such as new spending.

    Harris’ costlier proposals include expanding the child tax credit; increasing federal spending on housing and health care; reducing taxes on tips; increasing tax credits for child care and education; More spending on border control and extending expiring tax breaks for households earning less than $400,000 a year.

    Trump’s costlier proposals include tax cuts for corporations, increased military spending, increased spending on border security and eliminating taxes on tips, overtime pay and Social Security benefits.

    The group also evaluated low-cost and high-cost scenarios. While the numbers change, Trump would incur relatively more spending, less tax revenue, and higher interest expense than Harris under all scenarios.

    More: Harris says Trump tariffs will cost Americans $4,000 a year. Economists are skeptical.

    Inflation is a major issue that divides along party lines

    Inflation has emerged as Americans’ top economic concern, with respondents sharply divided depending on their political leanings, according to a new poll in which 41% of respondents ranked it first.

    About 58% of Republicans cited inflation and high prices as their top economic concern, compared with 28% of Democrats. The results of Bankrate’s political and economic survey, conducted in mid-September, elicited responses from 2,000 people. Health care costs are a distant second, cited as the top economic problem by 14%, and unaffordable housing is a distant third at 11%.

    “Although the inflation rate has fallen since its peak in 2022, prices today are still more expensive than before the pandemic, which continues to impact consumers’ finances, from their ability to save for emergencies to their ability to make enough deposits “retire,” said Bankrate.

    Americans are generally pessimistic about the economy overall: 55% say it is headed in the wrong direction, while 32% say the economy is in good shape and 13% are unsure.

    Respondents narrowly said they considered former President Trump to be the best candidate for their personal financial situation, with Trump being named as the best candidate by 42% of respondents, compared to 38% for Vice President Harris, with the remainder saying , neither is the best nor the best candidate answer.

    More: Treasury Secretary Janet Yellen says high U.S. tariffs would drive up prices

    How tariffs and China factor into the debate

    Tariffs are a complex economic issue that may be beyond the horizon of most voters. Still, Trump has made this a campaign issue by promising to raise tariffs by up to 20% across the board and 60% on goods made in China.

    Simply put, tariffs are taxes levied by the government when foreign goods enter the United States

    These additional costs are typically passed on to consumers in the form of higher prices, which can lead to inflation.

    Conversely, the federal government collects much-needed revenue from tariffs, and they enable U.S. companies to compete more effectively with foreign competitors. Tariffs have been implemented throughout the country’s history and are a much older form of federal revenue than income taxes. But high tariffs can trigger damaging retaliatory trade wars, as in the 1920s and 1930s.

    In any case, many Americans probably don’t have a good understanding of tariffs. A recent poll found that bipartisan majorities support generally maintaining the current relatively low tariffs as long as other countries follow the rules. The University of Maryland study also found that bipartisan majorities support higher tariffs on China.

    However, this survey was a “consultation survey” in which respondents were first informed about the advantages and disadvantages of tariffs and the content was checked for accuracy and balance. This format suggests that many respondents may have difficulty forming informed opinions about rates without coaching. The format also helps break down a complex topic into easily digestible chunks. You can take the survey and find out more about tariffs. It takes about 15 minutes to complete.

    Could both candidates be good for the economy and the stock market?

    Trump and Harris would leave very different marks on the economy and the stock market, but could the next four years be strong no matter who wins the White House? One economist agrees, attributing it largely to the rise of artificial intelligence and other entrepreneurial forces.

    “Americans are concerned about the transformation (of AI), but they need only look to other transformative technologies of the past, such as the mechanization of agriculture and industry, the advent of electricity and, more recently, the Internet,” wrote Peter Morici, an economist and retired economics professor, in an article for MarketWatch. “All of these innovations increased growth and employment in the U.S. as new occupations emerged for workers.”

    Morici expects Harris will support industries like AI, electric vehicles and solar energy while expanding social programs to help working families. He said Trump would rely more heavily on market forces while capping corporate taxes, raising tariffs and cutting taxes on overtime pay, tips and Social Security benefits.

    Under both candidates, inflation could remain a problem, Morici said, but he continues to forecast “robust” economic growth and corporate profits, as well as a buoyant stock market.

    Reach the author at [email protected].

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    Caradoc Wyn
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