Since President Joe Biden left the 2024 presidential race, Vice President Kamala Harris has proven more popular than Biden on economic issues, which are among the most important for voters. In July, 40% of registered voters trusted Biden to make good decisions on economic policy. By September, the figure for Harris was 45%. Despite this relative gain, Harris still lacks a clear advantage over former President Trump on economic policy, according to recent polls.
This raises a basic question: Were the benefits of Biden’s economic policies just poorly communicated to the public, or did these policies, while transformative in some ways, not do enough to overcome the impacts of inflation and decades of growing inequality?
The Harris-Walz campaign’s economic proposals suggest that they think the answer is a bit of both. Harris has dubbed her vision “an opportunity economy” and reframed spending as “investment,” but she’s not relying on rhetoric alone. She has detailed plans for a dramatic expansion of the Child Tax Credit, the construction of 3 million new homes and caps on costs that would make everything from insulin to groceries to child care more affordable.
Capital & Main spoke with a range of progressive economists and policy experts about Harris’ economic proposals. In assessing these ideas, they observed that policies are only part of the deep changes necessary to make a more fair economy.
“Policies are critical, but not sufficient,” Darrick Hamilton, professor of economics and urban policy at the New School, told Capital & Main. “They’re more paradigm-changing when accompanied with a vision that clearly articulates what is the purpose of the economy and the most treasured resource in which we’re investing, which is people.”
Despite high levels of polarization, there is broad public backing for some basic policies that provide such investment; recent polls show majority support for raising the minimum wage, adopting a wealth tax on billionaires and providing universal government-funded health care, among other measures.
Making Taxes Fair
“There is a lot of consensus among progressives that one of the big pieces of unfinished business for Bidenomics is that President Biden did not vanquish the trickle-down tax code,” Lindsay Owens, former economic policy adviser to Sen. Elizabeth Warren and executive director of the progressive think tank the Groundwork Collaborative, told Capital & Main.
Key parts of the Trump-era Tax Cuts and Jobs Act (TCJA) that Republicans passed in 2017 expire in 2025. Since the TCJA disproportionately benefited the rich, allowing it to lapse would shift the tax code so that the most affluent pay more. An analysis by the Tax Policy Center found that if its provisions are not extended in 2025, Americans in the top 1% of income distribution would see an average tax increase of $70,350. For those in the top 0.1%, the increase would be $278,240.
Harris has proposed undoing Trump’s tax cuts for the wealthiest Americans, instituting a minimum tax on billionaires and raising corporate tax rates. She would not raise taxes for Americans earning less than $400,000 and supports a 28% tax rate on long-term capital gains for those making over $1 million a year. While higher than the current rate of 20%, her proposal is still lower than the 39.6% rate for long-term capital gains that Biden endorsed.
“I would say that may be good politics, but it’s not good policy if we’re interested in inequality,” Robert Pollin, professor of economics at the University of Massachusetts, Amherst, said of Harris’ proposal on capital gains tax. He noted that in the 1950s under President Dwight Eisenhower, a Republican, the top tax rate on individual income was over 90%. “Neoliberalism has kind of changed the terms of the debate and, unfortunately, the Democrats have gone along with it for two generations.”
“We should really be leaning into taxes for the rich,” Heidi Shierholz, chief economist at the Department of Labor under the Obama administration and now president of the Economic Policy Institute (EPI), told Capital & Main. Harris’ cutoff of $400,000 for tax hikes suggests anyone making less than this figure is not rich. Shierholz argued that while there are different ways to define the term, this limit may be too high: “In my mind, essentially every possible way of defining the wealthy will include some people making less than $400,000 a year.”
To others, these differences are less crucial: “If we are in a position next year where we are arguing over how much to tax the rich and how exactly to tax them, not whether to tax the rich, I’m going to be really happy,” Owens said. Sen. Chris Murphy of Connecticut sees the $400,000 figure as reasonable. “Obviously, people who are making $300,000 are doing pretty well, but there is enough wealth concentrated above the $400,000 mark that you can make a lot of the investments we need to make by asking folks who are making more than $400,000 to pay a little bit more,” he said.
Building a Care Economy
More tax revenue could support Harris’ plans for “the care economy,” a broad sector that includes child care, elder care and health care. Harris has promoted “a future where every person has access to paid family leave and affordable child care.” Harris also supports capping out-of-pocket drug costs at $2,000 a year and insulin co-pays at $35 for all Americans, providing more support for health care premiums and expanding the quality and affordability of care for seniors and children.
“The care piece and the tax piece really go together, and I think you can make that argument to the American public,” Felicia Wong, president of the Roosevelt Institute, a progressive think tank, told Capital & Main. Raising wages for all sorts of care workers also presents an opportunity to build a strong middle class, according to Ai-jen Poo, a MacArthur “Genius” Award winner and senior adviser to the advocacy group Care in Action. “In the 1930s and ’40s in the manufacturing sector, those jobs were poverty-wage jobs that were dangerous. A lot of immigrants did those jobs, and we turned those jobs into the biggest onramp to the middle class in the history of the world. And I see the transformation of the care workforce … as a similar generational opportunity.”
The EPI’s Shierholz stressed that programs offering affordable child care and medical care “are the kinds of things that our peer countries have around the world. They’re very good for those economies. They maximize labor force participation.” The New School’s Hamilton argued that Harris should support a universal public option for health care as “a commitment, a right and investment.”
Harris recently announced a child care plan that would limit the cost of care to 7% of the income of working families, noting the economic benefits of affordable child and health care: “It strengthens our economy to do things like pay attention to affordable child care, affordable home health care and extending the Child Tax Credit,” Harris said.
Getting More Ambitious
The 2021 expansion of the Child Tax Credit decreased the child poverty rate in America to an historic low of 5.2%. If Congress had continued the program in 2022, approximately 3 million additional children would have been kept out of poverty, according to a report by the nonpartisan Center on Budget and Policy Priorities.
“We basically reduced child poverty in half in six months … that is like lightning speed for any policy impact,” said Dorian Warren, co-president of Community Change and co-founder of the Economic Security Project. “We can actually just altogether abolish child poverty”
Harris and Walz have endorsed this goal in campaign materials, declaring that “no child in America should live in poverty.” They also support restoring and expanding the Child Tax Credit to provide $6,000 to families with newborn children.
Eliminating poverty — not just for children but for all Americans — would likely require several ambitious policies. Over 36 million Americans live in poverty, according to 2023 census data. While still a senator, Harris proposed legislation called the LIFT Act that would have paid lower-income families up to $500 a month and suggested repealing the Trump tax cuts to fund it. As a presidential candidate, she has announced plans for a modest expansion of the Earned Income Tax Credit similar to the LIFT Act. “I think that if she … actually supercharged the LIFT Act … that would go a long way [toward abolishing poverty],” Warren said.
Another strategy that targets poverty is the use of “baby bonds,” funds automatically deposited into savings accounts for newborns, who can access the capital when they turn 18. Connecticut recently became the first state in America to implement such a program, depositing $3,200 into the accounts of roughly 15,000 infants in the state’s Medicaid program. The state estimates the funds could be worth up to $24,000 by the time the young people access them. Rep. Ayanna Pressley (D-Mass.) and Sen. Cory Booker (D-N.J.) have repeatedly introduced a federal version of baby bonds called the American Opportunity Accounts Act.
The New School’s Hamilton, one of the architects of baby bonds, would also like to see a national version of the program so more people have the capital to “purchase a home, fund a debt free education … engage in entrepreneurship,” he said. Connecticut Sen. Murphy has proposed a range of policies to help the poorest Americans. “I’m all for a variety of ways to raise the economic floor. I think that could involve baby bonds, an increase in the minimum wage, an educational guarantee that extends beyond 12th grade,” he said.
As a senator, Harris supported Green New Deal legislation that included a job guarantee for all Americans. Though she has recently reversed her position on a job guarantee, such a program could accelerate a green transition, expand the care economy and provide economic stability to millions of Americans, according to Pavlina Tcherneva, an economist at Bard College who has studied job guarantees. “If Kamala Harris is talking about an ‘opportunity economy,’ a jobs program fits absolutely perfectly,” she said.
The Harris campaign did not respond to a request for comment.
Progressives recognize that some of these policies could prove politically unfeasible, but if Harris wins they will try to advance them as they can. “I’m clear and sober about what our job on the outside is: pushing a Harris administration to make good on these promises,” Warren said.
