Kamala Harris and Donald Trump present two visions for economy

WASHINGTON — Vice President Kamala Harris and former President Donald Trump, both aware that polls show the economy is the top issue for voters, each have rolled out proposals they contend will boost it.

Both tout their personal backgrounds in making their economic pitches. Trump, a former reality TV star, contends that he brings his private-sector experience, including real estate, to the job. Harris argues that her middle-class upbringing enables her to understand the economic challenges most Americans face.

Whoever wins the election on Nov. 5 will inherit an economy that most economists contend is solid, but which polls show a majority of Americans feel uneasy about. More than half of registered voters — 60% — rate the economy as "fairly bad," or "very bad," according to a CBS News poll released on Oct. 14.

"In totality, the economy's performance is about as good as it gets," said Mark Zandi, chief economist at Moody’s Analytics, a nonpartisan economic research firm.

Zandi, who has advised presidential candidates on both sides of the aisle, told Newsday that polls may reflect continued concerns over post-pandemic inflation that increased prices for consumers.

"The economy is a big elephant, [and] depending on which part of the elephant you touch, you get a different perspective on things. But take a step back and look at the entire elephant; it's very healthy," Zandi said. "Job growth is strong, low unemployment, inflation that's back in the bottle, record stock market, record housing values. So for the typical American, this is an exceptional economy."

Here is a look at some of the economic proposals floated by each campaign, most of which would require backing from Congress.

Taxes and tariffs

Trump proposes cutting the U.S. corporate tax rate and enacting across-the-board tariffs on imported foreign goods, while Harris’ plan calls for increasing taxes on U.S. corporations and boosting tax credits for families and low- to middle-income earners.

Under Trump’s plan, the corporate tax rate would go down slightly from its current 21% to 20%. Corporations that manufacture their products in the U.S. would see their tax rate decrease to 15%.

He also proposes blanket tariffs on imported goods — arguing that imported goods should face 10% to 20% tariffs and Chinese goods should face an even higher 60% tariff.

"The higher the tariff, the more likely it is that the company will come into the United States and build a factory in the United States so it doesn’t have to pay the tariff," Trump said in Chicago earlier this month at an economic forum.

Economists contend the tariffs could result in immediate higher costs for consumers, as foreign manufacturers would likely increase prices to offset the tariffs. The tariffs also could weaken trade and demand for U.S. products.

"While new import taxes and tariffs could raise several trillion dollars in new revenue over the next decade, they could also lead to revenue losses due to potential retaliatory actions from other governments and other economic dynamics," according to an analysis by economists at the University of Pennsylvania’s Wharton School of Business.

Harris proposes increasing the corporate tax rate to 28%, arguing that doing so is "a fiscally responsible way to put money back in the pockets of working people." She has promised not to increase taxes on individuals making less than $400,000 per year, and has described Trump’s tariff plan as a "tax" on consumers.

Economists at Wharton said in an analysis that under Harris’ plan, low- and middle-income household would "fare better under the campaign proposals on a conventional basis, while households in the top 5% of the income distribution fare worse."

Zandi summarized the two approaches:

"Trump's policy is twofold," he said. "One is isolationist — higher tariffs, fewer immigrants — and broad-based, deficit-financed tax cuts, for all individuals ... low income, high income, all businesses, including corporations. So just across the board, tax cutting.

"Harris is about raising taxes on the highest income, high net-worth households, corporations, and using that to fund tax cuts for lower middle-income households and small businesses."

Both candidates support exempting tipped earnings from taxation.

Housing

Harris has proposed a plan to build 3 million new homes in the U.S. over the next four years by offering tax incentives to builders and federal grants to municipalities to speed up the construction process.

Her plan also calls for providing first-time homebuyers with up to $25,000 in down payment assistance.

"We will take down barriers and cut red tape, including at the state and local levels," Harris said at an Aug. 16 speech in Raleigh, North Carolina, "By the end of my first term, we will end America’s housing shortage by building 3 million new homes and rentals that are affordable for the middle class."

Trump, on the campaign trail, also has called for the creation of new homes, but has not specified how many units or a time frame. He has argued that he would ease permitting and zoning restrictions, telling Bloomberg in an interview: "I went through years of zoning ... it’s a killer."

Both candidates have said they support opening some federal lands to create new housing.

Child care

Both campaigns have said they would support expanding the child tax credit to help families with rising costs, but both candidates differ in approach on how to reduce rising child care costs.

Harris has proposed capping the cost of child care to 7% of a family’s income, but has not specified how such a plan would work.

Trump, when asked at a recent Economic Club of New York event whether he would commit to supporting affordable child care legislation, said "it’s a very important issue," but avoid answering the question directly.

"Child care is child care — you know, you have to have it in this country, you have to have it," Trump said.

Harris has proposed a $6,000 child tax credit for parents of newborns to assist with the purchase of essentials, and she has called for restoring the expanded child tax credit that was made available to the majority of U.S. families in 2021 in response to the COVID-19 pandemic. The expanded child tax credit would boost the base credit of $2,000 per child, to $3,600 for children ages 6 and under, and $3,000 per child over the age of 6.

Trump’s official campaign platform makes no mention of the child tax credit and child care, but Trump’s running mate, Sen. JD Vance of Ohio, told CBS News in August: "I'd love to see a child tax credit that's $5,000 per child."

A November 2022 study by the Columbia University Center on Poverty and Social Policy found the expanded child tax credit helped lift 3.7 million children out of poverty.

"When the Child Tax Credit expired, child poverty essentially quadrupled in one year, and so reimplementation of the credits that were created as a temporary COVID measure, making those permanent, I think, is to be commended on both sides here," Steven Durlauf, director of the Stone Center for Research on Wealth, Inequality and Mobility at the University of Chicago, told Newsday.

By Laura Figueroa Hernandez

laura.figueroa@newsday.com@Laura_Figueroa

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.