In this episode of Moderate Minis, Hillari Lombard explores Vice President Kamala Harris's sweeping economic policies aimed at tackling affordability and creating new opportunities. Harris targets the high cost of living and corporate greed with proposals to invest in small businesses, enforce price gouging laws, and expand tax credits. Her ambitious agenda includes raising the child tax credit, introducing a $6,000 newborn tax credit, and making the Earned Income Tax Credit more accessible. These measures, while promising to reduce financial stress and child poverty, spark debates over their $1.4 trillion price tag and potential increase in government dependency. Harris's strategy also involves fostering 25 million new small businesses through government contracts and low-interest loans, funded by tax hikes on the wealthy and corporations. Critics worry about the impact on investment and national debt, but supporters argue it's a fair approach to tackling income inequality and providing better social outcomes. The feasibility of passing these through Congress remains a big question mark, coloring Harris's policies as both ambitious and contentious.

[00:00:31] Then at the end, we're going to swing back around and talk about how she's going to pay for it and if it's a good idea. Let's get started.

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[00:00:45] Vice President Kamala Harris: The cost of living in America is still just too high. You know it and I know it. Millions of Americans are sitting around their own kitchen tables and facing their own financial pressures because over the past several decades, our economy has grown better and better for those at the very top and increasingly difficult for those trying to attain, build and hold on to a middle class life.

[00:01:38] And if you hear that and think, holy shit, we're so divided, how are we ever going to make it? Yep, you're right, and that is a different episode. You may remember when President Biden was still the Democratic nominee, the economy was a big problem for him. Even though at a high level, there were positive indicators. Things like GDP, employment, and even the inflation rate were all showing positive trends. But even though the macroeconomic metrics looked good, the microeconomic numbers didn't feel good.

[00:02:05] One of the most talked about topics in the inflation conversation has been the price of groceries. Grocery prices have increased 20 percent compared to four years ago, and that's huge.

[00:02:20] Vice President Kamala Harris: As president, I will take on the high costs that matter most to most Americans, like the cost of food.

[00:02:39] And she's not wrong. Corporate consolidation in the food industry is a huge problem. Huge segments of the food industry are controlled by four firms or less, and at a retailer level, it is even more consolidated. When consumers have less options, it is easier to raise prices because consumers don't really have any other options.

[00:03:10] She's also said that she'll direct her administration to crack down on unfair mergers and acquisitions that give food corporations the power to jack up prices.

[00:03:32] Former President Donald Trump: I'm better looking than she is.

[00:03:34] Former President Donald Trump: In her speech yesterday, Kamala went full communist. Comrade Kamala announced that she wants to institute socialist price controls. You saw that never worked before.

[00:04:07] Hillari Lombard: There is a lot going on here.

[00:04:15] And, not for nothing, if you're frequently being accused of being a socialist and a communist, coming out with a policy that can easily be labeled as price controls, not ideal.

[00:04:27] Also, if banning price gouging is communist, then we've been communist since 1979.

[00:05:07] But like, this policy isn't going to fix high grocery prices. The ban on price gouging would only cover those asshole companies that want to charge 10 for a bottle of water after a hurricane. And cracking down on that is important.

[00:05:32] If there's a blue wave and Democrats win a majority in both houses of Congress, then they may be able to get a ban on price gouging through. But they're very unlikely to do that.

[00:05:56] No way. It won't pass. But if it did, it won't matter that much.

[00:06:07] Empowering and investing in the FTC, and directing them to be aggressive in their approach to investigating mergers, acquisitions, corporate consolidation, and corporations that are up to no good, those things are always worth our time,

[00:06:23] It's just not the silver bullet that her campaign is saying that it is.

Tax Policy for Individuals and Families

[00:06:30] Vice President Kamala Harris: the most practical thing we can do right now is to cut taxes for middle class families and individuals. And that's what we will do.

[00:07:32] In 2021, during the pandemic, Mitt Romney led a bipartisan effort to increase the child tax credit and give it to families as a direct cash payment, instead of a lump sum at the end of the year.

[00:08:06] It became politically toxic to try and get rid of it. So they did renew it, but they renewed it at almost half of what it was during the pandemic. And if Congress can't come to an agreement about this credit in 2025, then the amount that families receive will drop by another 50%.

[00:08:35] She also wants to create a tax credit that would give families with a newborn up to 6, 000 to cover the cost of their first year of life. What I really like about the newborn tax credit is that it is new and innovative policy. Like, we've really never tried something like this before, at least not at this scale. And if you don't have kids, just think about how demoralizing it would be. Have to put so much of your money towards diapers that your baby literally shits in, formula that they eat so that they can keep shitting in those diapers that you paid for, and childcare. Like, you're pouring so much money into this baby that is literally just shitting on your efforts. That's frustrating. And this policy would really help reduce some of those financial pressures, and also, as awful as I just made it sound, that first year of your baby's life is a really magical time and one that you will never get back. And if we, as a society, can make it easier to really care for your child during that period, I think we should do that.

[00:09:41] Expert opinion is more mixed. So let's talk pros and cons.

[00:09:58] The increased credit would provide [00:10:00] immediate financial relief to middle and lower income families. Supporters have also highlighted that this policy could strengthen overall economic security for families which would make parenthood more affordable. By reducing economic hardships, families would be better positioned to spend in other areas or to stay engaged in the job force, potentially stimulating economic growth. There is also no denying that this policy produces healthier childhood outcomes.

[00:10:43] So now let's talk cons. It's expensive. No question. Harris's plan to expand the child tax credit would cost roughly 1. 4 trillion dollars over 10 years. To give you a point of reference for that, our current child tax credit costs us about 1 trillion every 10 years, so we would be effectively doubling it.

[00:11:07] We're going to be spending money no matter what. So the question is really, how do we spend it and where do we think it makes the most sense to invest? For me, Investing in the future of our country by investing in children is a good investment.

[00:11:23] Other critics including conservative leading experts at the American Enterprise Institute argue that this would incentivize people not to work and increase the number of people dependent on government to live. They argue that a non working single parent with two children would receive between 6, 000 and 10, 000 from Harris child allowance.

[00:12:02] But it's not just kids and families that Harris wants to invest in. She also wants to hook it up for the childless cat ladies and the childless plant daddies as well. She wants to expand something called the Earned Income Tax Credit, also known as the EITC.

[00:12:31] Her plan would also allow eligible workers and families to receive their credits as monthly payments, providing consistent financial support throughout the year, instead of a lump sum when they file their taxes.

[00:13:08] And opponents worry about the long term fiscal sustainability of such expansions, especially if other social programs are also being expanded. We spend so much money on entitlements and social programs. Increasing them only makes that situation worse.

[00:13:39] Expanding that credit could exacerbate this issue unless accompanied by administrative reforms to improve oversight. We have a really complicated tax code.

[00:14:01] Critics have also argued that this would provide a disincentive for certain workers, because while the EITC encourages work for many people, there's also a concern that higher credits could create a benefits cliff. This is where workers may choose not to pursue a higher paying job or additional work hours because they don't want to lose the benefits that they receive from the EITC or similar programs.

[00:14:32] There could be delays or administrative hurdles that could prevent people from receiving their benefits in a timely manner. I feel like the IRS is like one step above the DMV when it comes to both being the most hated branches of government and also the slowest and least efficient.

[00:15:08] The way that I see it, there are benefits to this policy. but the challenges of implementing it are really great. and I worry that if there is widespread fraud, we already have a lot of fraud when it comes to EITC.

[00:15:27] Beyond these tax policies, Harris also has major policy proposals around housing and making healthcare more affordable. But those are two issues that we care a lot about, so I'm actually going to cover her plans in separate episodes, one on housing and one on healthcare.

[00:15:43] One of the major pillars of Kamala Harris's opportunity proposals is her plan for small businesses.

[00:16:03] Hillari Lombard: She's been very aggressive rhetorically on her vision for businesses in America. She wants 25 million new business applications within the four years of her presidency. And she plans to do that by directing a third of federal contract dollars to small businesses.

[00:16:29] I actually find her small business proposals to be some of the most exciting that she's released so far. Small business owners tend to be disproportionately middle class. So by investing in small businesses, we are investing in the middle class in a real and measurable way.

[00:17:01] It also helps level the playing field for people that don't already have access to that startup funding. People that have access to capital normally already have those pathways available. They're either in a positive financial position, so a bank is inclined to lend them the money, or they know somebody that already has it that's willing to help them out.

[00:17:48] But as with all things in this episode, she's expensive.

[00:18:06] It is not right that teachers and nurses and firefighters are paying a higher tax rate than billionaires and the biggest corporations, and I plan on making that fair.

[00:18:33] According to Harris they've been dodging taxes for too long. And she plans to roll back the Trump era tax cuts that we talked about in the last episode, raising the corporate tax rate to 28 percent and taxing income above 400, 000 a year more aggressively.

[00:19:04] So Jeff Bezos is basically still getting the same Venmo request, it's just from a different person.

[00:19:25] Please don't buy one. Please, please. I know it, it feels like it goes without saying, but you never know, so I just want to be very clear. Google them, laugh at them, do not buy them. Anyway, right now, a lot of rich folks pay a lower tax rate than the rest of us do on our paychecks.

[00:19:57] She's basically gonna grab you by the ankles and shake you [00:20:00] upside down till all the coins come out. And if you're wondering if she can shake enough coins out of the pockets of the wealthy, the answer is kind of? Harris claims the tax hikes will generate around three trillion dollars over ten years. That's a lot of money. It's the kind of money that makes you wonder why Monopoly didn't come with a tax the rich card.

[00:20:31] But it means that her tax reforms need to hit a pretty narrow bullseye.

[00:20:50] There are also concerns that her capital gains proposal could have some unintended consequences for middle class investors. Critics argue that while capital gains are often framed as a way to target the wealthy, they can also impact the middle class. Many Americans have investments in the stock market through their retirement accounts like 401ks and IRAs.

[00:21:16] There are also concerns that higher capital gains taxes could exacerbate the problems in the housing market. Heavily when selling a property, it might discourage downsizing or moving, further limiting the housing supply and making homes even less affordable. Critics also point out that enforcing a higher capital gains tax can be really complicated.

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[00:21:59] Like most democratic policies, what Harris is proposing is really complicated, which also brings us to the question of what can she actually do?

[00:22:19] . Even if you talk quietly, Republicans probably won't vote for a lot of this. So it really depends on how many seats Democrats win in Congress.

[00:22:40] will provide substantial financial relief if implemented correctly. Her newborn tax credit is awesome. Raising the corporate tax rate closer to what it has been for the last 30 years seems like the right move to me because unless we're going to jack up individual income taxes, we need to generate more tax revenue and I would so much rather have it come from corporations than from us.

[00:23:20] But if we raise the corporate tax rate, then that burden is also carried by workers, due to low wages.

[00:23:36] Economists from the Wharton Budget Model estimate that Harris's policies would cost over two trillion in the next decade, potentially increasing our national debt. However, they do argue that her proposals would lead to improved social welfare outcomes for low and middle income groups.

[00:24:11] That's all I have for you today. So please stay tuned to the next episode of moderate minis. It's going to focus on housing until then stay safe. And if you like this episode, please don't forget to like rate, subscribe, do all the things

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