Vice President Kamala Harris' tax reform proposal would effectively eliminate about 800,000 full-time jobs, according to a study released Tuesday by the Tax Foundation.
Harris' suggestionThe Tax Foundation predicts that measures such as raising corporate tax to the highest level in the developed world would result in a loss of about 786,000 full-time equivalent jobs and a 2% decline in gross domestic product and 1.2% decline in wages in the long term. FoundMeanwhile, President Trump's proposal, which includes a 60% tariff on China, Lower Employment would fall by about 387,000 full-time equivalents, long-run GDP would fall by 0.2%, and long-run wages would increase by 0.6%. (Related story: “Inexplicable”: Shelter costs continue to soar under Biden-Harris administration)
“we [Harris] “Tax reform would leave our top corporate and individual income tax rates among the highest in the developed world, slowing economic growth and reducing competitiveness,” wrote the Tax Foundation study authors William McBride, Erica York, Garrett Watson and Alex Muresianu. “Tax credits and other exceptions would complicate the tax code, drive more spending through the IRS, and, combined with various price controls, would not improve the problem of high home prices in housing and other sectors.”
We believe that Harris' tax plan would shrink the economy while redistributing a significant amount of income to the bottom 60% of taxpayers. pic.twitter.com/vkZtMw2DhO
— Erica York (@ericadyork) September 11, 2024
Harris proposes raising the corporate tax rate from 21% to 28%, which would make far more businesses have no after-tax profits and therefore not worth pursuing, stifling economic growth. According to To the Tax Foundation.
She also proposed an unrealized capital gains tax that would tax the increase in asset value before the property is sold, which would effectively tax Americans for investing their money in the stock market instead of spending it. According to According to the Cato Institute, capital investment is a key driver of economic growth because it allows companies to conduct research and development and ultimately bring new, innovative products and services to the marketplace. According to Go to Investopedia.
Harris' tax on unrealized gains could also cause Americans to move their assets overseas to avoid the additional tax burden. A wealth tax imposed in France in 1989 on assets over €800,000 led to capital flight worth €200 billion between 1989 and 2007, and the exodus of 40,000 billionaires. According to To French economist Eric Pichet.
Meanwhile, Trump in 2017 Tax Cuts and Jobs Act Trump has proposed lowering the corporate tax rate from 35% to 21%, plus adding a 15% rate for some companies, according to the Tax Foundation. But his proposal to raise tariffs on China to 60% and impose a flat 10% tariff would wipe out much of that growth, according to the study.
Trump's economic plan, which includes a series of tariffs and the repeal of the Inflation Control Act of 2022, could increase the federal deficit by $1.3 trillion, while the net effect of Harris' proposals could increase the deficit by $1.5 trillion to $2.6 trillion, according to a Tax Foundation study. The federal debt was about $35.35 trillion as of Monday. According to To the U.S. Treasury.
“The wide range of possibilities reflects considerable uncertainty about the current posture of fiscal policy and leaves a large vacuum in terms of how to address an already unprecedented, dangerous and unsustainable federal debt trajectory,” the Tax Foundation study authors wrote.
The Harris campaign did not immediately respond to a request for comment.
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