Don Raskin, economist and chief investment officer at Trend Macro, warned on Fox Business' “The Evening Edit” on Tuesday that Vice President Kamala Harris' proposed corporate tax hikes could result in a 13% cut in Americans' 401(k) savings.
On Monday, Harris' campaign confirmed her proposal to increase corporate taxes by 7 percentage points, pledging to raise the tax rate from 21% to 28% if elected in November. Luskin slammed Harris' plan, saying it would not only drive up expenses by 33%, but also hit Americans' 401(k) savings in the process. (Related article: US companies considering supporting Harris despite profit-seeking ambitions: Report)
“Let's talk about the 28% corporate tax rate. Here's the big issue. First, the Treasury is making more profit at the current 21% corporate tax rate than it would have expected at the higher tax rate pre-Trump. So you want to reduce the deficit? Don't raise corporate taxes,” Raskin said.
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“Secondly, corporate taxes are just an expense for corporations, a huge expense. If you raise corporate taxes from the current 21% to Kamala Harris' preferred 28%, you're going to increase expenses by 33%,” Luskin continued. “Expenses are going to increase by 33%. S&P 500 revenues are going to go down 13%, S&P 500 is going to go down 13%, 401(k)s are going to go down 13%. Any other questions? I don't think there are.”
The move to raise corporate taxes comes on the heels of Governor Harris' speech in North Carolina, where she unveiled an economic plan on housing, tax credits and lowering food prices that has faced significant backlash over a proposed federal ban on “corporate price gouging.”
Despite her plans to increase taxes and regulations, many business leaders are reportedly considering supporting Harris. According to According to the Financial Times, business leaders have traditionally supported Republicans, but many are hoping Harris will reconsider Biden's firm positions on competition, labor and financial services policy.
“In a matter of weeks, the business world has gone from preparing for a Republican-led Washington to scenario planning for a range of outcomes,” Republican consultant Ken Spain told the Financial Times. “Given the volatility of the political environment, many companies are taking risk aversion measures.”
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