What are Harris and Trump’s positions on the economy?

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Part one of TDA's series on the main issues in the U.S. election: What are Harris and Trump's positions on the economy?
What are Harris and Trump's positions on the abortion?

In TDA’s U.S. election series, we will cut through the noise of the campaigns, and bring you Harris and Trump’s positions on the economy, abortion, and immigration.

In five days, more than 100 million people in the U.S. are expected to vote for the next President.

The White House race is between the current Vice President Kamala Harris (Democrat) and former President Donald Trump (Republican).

Ahead of next week’s vote, TDA is cutting through the noise and breaking down the biggest election issues.

We’ll compare Harris and Trump’s plans for the economy.

The US economy

The U.S. is the world’s biggest economy, and it remains a high-priority issue for voters.

A senior adviser to former President Bill Clinton said the 1992 U.S. election was about “the economy, stupid”. 32 years later, he’s probably still right.

Last month, 81% of voters ranked the economy as a top issue, according to polling by Pew Research Centre. New research from the American Psychological Association this week found 73% of Americans are stressed about the economy.

Economic state

Like most major economies, the U.S. has seen high annual inflation (rising prices) over the past few years.

It peaked at 9.1% in June 2022 and was consistently high through mid-2023. It fell to 2.4% in the year to September.

The unemployment rate has also been relatively low at 4.1%, down from a pandemic high of nearly 15% in April 2020.

Two weeks ago, the editors of The Economist said the American economy is “bigger and better than ever”.

Kamala Harris

Harris has promised to develop an “Opportunity Economy”, defined as giving everyone “a chance to compete and a chance to succeed”.

Among her promises are two tax credits (discounts): a $US6,000 ‘Child Tax credit’ for families with newborns and an ‘Earned Income’ credit for low and middle-income earners.

She’s also committed to a $US25,000 grant for first-home-buyers to put down a deposit on a property.

Harris has also promised to push for a national ban on grocery price gouging, where supermarkets unfairly increase the cost of food.

Another planned reform is to lower the cost of medicine. This will require legislation, and depend on the Democrats’ overall success in both houses of Congress.

If Harris wins the Presidency and her party secures a majority in the House of Representatives and Senate, it will be able to pass the law.

At present, Republicans control the House, while Democrats have a majority in the Senate.

Donald Trump

Trump has blamed the current Biden-Harris administration for what he describes as “raging inflation”.

He has campaigned with a plan to “defeat inflation, and quickly bring down all prices”. Trump has promised to increase oil and gas production, cut workplace regulations, crack down on “wasteful” government spending, and stop “illegal immigration”.

Trump has also proposed lowering the tax rate from 21% to 15% for companies that “make their product in America”.

Trump says he wants a “fairer deal” for U.S. manufacturers and trade.

During the presidential debate against Harris, he committed to putting “tariffs on other countries”, some of which he said would be “substantial”.

This would mean goods exported and imported from overseas would have significant taxes imposed on them. Many countries, including Australia, have worked towards ‘free trade’ deals with the U.S, where there are no tariffs on imports and exports.

Both Harris and Trump have promised to scrap taxes on hospitality workers’ tips.

Polls

Opinion polls taken early last month asked voters who they trust to handle the U.S. economy. Trump polled 10% ahead of Harris.

However, more recent polling has shown the attitudes may have shifted.

Earlier this week, an Associated Press/NORC poll showed 46% of people preferred Harris’ economic policies, compared to 35% for Trump.

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