If Vice President Kamala Harris becomes president and passes her tax plan, it could cost the U.S. economy nearly 800,000 full-time equivalent jobs, according to a new analysis.
Harris’ plan is largely a continuation of President Joe Biden’s 2025 budget, which would raise taxes on high-income earners, corporations and investors who sell stocks.
Harris is breaking with Biden in her desire to offer a $25,000 tax credit to first-time homebuyers and eliminate tip taxes.
In summary, group of experts Tax Foundation believes that this policy will lead to a 2 percent decline in GDP in the long term and a 1.2 percent drop in wages in the long term, as well as a marked effect on employment.
“Similar to the president’s proposals, we find that it would reduce the long-term growth of the economy, reduce American incomes relative to where they would otherwise be, and lose, rounded off, about 800,000 jobs over the long term,” said Garrett Watson, a senior policy analyst and modeling manager at the Tax Foundation. FOX Business.
Kamala Harris’ tax plan could cost the economy nearly 800,000 jobs, Tax Foundation analysis finds
Garrett Watson (pictured) says Harris’ tax plan creates “disincentives to work”
“This is mainly due to the disincentives to work under his plan and to investment, which produces higher incomes and creates jobs,” Watson added.
The foundation says only one of its 17 major policy proposals will actually create jobs, and that is eliminating the income tax on tipped wages, an idea first popularized by former President Donald Trump.
Raising the net investment income tax from 3.8 percent to 5 percent and increasing the Medicare surcharge from 0.9 percent to 2.1 percent would cost 177,000 jobs, the analysis found.
Harris wants to make permanent the American Rescue Plan’s expansion of the earned income tax credit and revive that law’s child tax credit, which offered families $3,600 per child under age 6 before it expired in 2021.
Harris also wants to increase the child tax credit to $6,000 for newborns.
These tax breaks for families with children will cost 131,000 jobs, the analysis says.
According to the foundation, the next biggest job destroyer is Harris’s idea to raise the corporate tax rate from 21 percent to 28 percent.
That could remove up to 125,000 jobs from the economy while having the biggest impact on GDP.
The Tax Foundation analyzed how Trump’s second-term tax policy could affect the economy, concluding that his plans would lead to a net loss of 387,000 jobs over the long term.
Raising the top marginal personal income rate to 39.6 percent for people earning $400,000 as a single filer or $450,000 as a joint filer would cost 86,000 jobs.
Taxing unrealized capital gains of more than $5 million at death (or $10 million for joint filers), and taxing capital gains of more than $1 million at a rate of 28 percent would cost 75,000 jobs.
The Tax Foundation also looked at how Trump’s tax policy during a second term could affect the economy.
In total, his stated plans would lead to a net loss of 387,000 jobs in the long term.
If Trump succeeds in making permanent the Tax Cuts and Jobs Act, the law he signed in 2017 that expires in 2025, he will create a combined 911,000 jobs.
However, Trump’s plan to raise tariffs on China to 60 percent and impose a universal 10 percent tariff on all goods imported into the United States would cost 674,000 jobs.
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