In the hypothetical scenario where Vice President Kamala Harris assumes the U.S. presidency following the Biden-Harris administration, many Americans are questioning the potential economic impacts and fiscal policies. The current administration has made numerous policy changes over the last four years, primarily focused on tax reform, climate initiatives, and social welfare programs, often targeting corporations and high-income earners for increased taxes to fund broader social and infrastructure projects. But what would the economy look like under a Harris presidency, and how would it compare to a potential return of Donald Trump?
Under the Biden-Harris administration, one of the most significant shifts aside from the highest inflation in decades has been an increase in taxes on corporations and high-income individuals. Intended to support funding for the American Rescue Plan and other social welfare programs, these tax reforms were aimed at balancing income inequality and addressing national issues like healthcare, education, and infrastructure. However, critics argue that these taxes have placed a burden on the broader economy. Many American businesses have expressed concerns that these increases make the U.S. less competitive globally, driving companies to seek tax breaks abroad and stifling domestic growth and job creation.
If Kamala Harris were elected president, it is anticipated that her administration would continue along similar lines, potentially expanding on these existing policies. Harris’s platform has generally emphasized social equity, climate resilience, and wealth redistribution as key priorities. Her supporters argue that such policies could create a fairer and more sustainable economy. However, opponents fear that these initiatives would add to the tax burden, potentially further slowing growth and discouraging entrepreneurial ventures.
In contrast, former President Donald Trump’s approach to the economy focused on reducing taxes and regulations, aiming to stimulate growth by giving businesses more flexibility and lowering operating costs. His administration enacted the Tax Cuts and Jobs Act of 2017, which lowered corporate tax rates from 35% to 21% and included provisions for temporary tax breaks for individuals. The Trump administration argued that lowering taxes incentivizes investments, drives economic growth, and increases employment opportunities, especially in traditionally strong sectors such as manufacturing and energy.
Supporters of Trump point to the economic growth and low unemployment rates before the COVID-19 pandemic as evidence that his policies were effective in strengthening the economy. Should Trump return to office, many believe he would push for another round of tax cuts and work toward reversing many of the regulatory measures implemented under Biden and Harris. Supporters argue that Trump’s policies would lead to greater business expansion and more opportunities for individual wealth accumulation across the middle and upper classes.
Regardless of who is in office, the next administration will face substantial challenges as it navigates a landscape of rising national debt, inflation concerns, and the long-term economic effects of pandemic relief spending. Both Harris and Trump would need to address inflation, which has placed a significant burden on American families. Trump has historically preferred to tackle inflation through interest rate adjustments and monetary policy, advocating for an independent Federal Reserve. Harris, on the other hand, may seek to address inflation with a multifaceted approach that includes further government spending, subsidies, and a focus on price controls or incentives for essential goods.
One critical difference lies in their approach to wealth distribution and government involvement. A Harris administration would likely prioritize policies aimed at closing the income gap, investing in social programs that provide more opportunities for low-income demographics, which could lead to increased government spending. Conversely, Trump’s policies would likely focus on stimulating the private sector, assuming a “trickle-down” approach in which benefits to corporations and high-income earners translate to broader economic growth.
The election of Kamala Harris could signal a continuation or expansion of the Biden administration’s policies, likely resulting in more taxes on high earners and corporations to fund social programs. Critics warn that such policies could strain the economy, especially for small businesses and middle-income earners. On the other hand, Trump’s policies may offer a more business-friendly environment, potentially spurring growth at the cost of reduced social welfare spending and an increase in the wealth gap.
In either scenario, the path forward will involve difficult trade-offs. Economic recovery, inflation control, and balancing the budget will be central to the decisions that shape America’s future. The outcome of the 2024 election will set the course for these policies, determining the extent of government involvement in the economy and the tax burden borne by businesses and individuals alike.
