How Trump and Harris differ on taxes, spending, inflation, tariffs
Donald Trump and Kamala Harris offer different plans for the economy, taxes, spending and more. Here are some of the ways they differ and what voters view as the most worrisome financial issues.
As the presidential campaign heads into the homeward stretch, the candidates and their proposals face ongoing scrutiny. Inflation has emerged as a top economic concern among voters, but taxes, tariffs and other topics also figure prominently, as do the repercussions of policies on the national debt.
Research groups, pollsters and others continue to advance new findings and opinions. Here are some that might affect your personal finances:
How might the candidates add to the national debt?
Fiscal restraints don’t seem to be a priority of either presidential candidate, but policies advanced by former President Trump could add more red ink to the federal debt compared to those favored by Vice President Harris.
The Committee for a Responsible Federal Budget said it analyzed every major policy proposal from the two candidates under different scenarios. Harris’ proposals would add $3.5 trillion to the national debt through fiscal year 2035 under the group’s central or mainline estimate, while Trump would add $7.5 trillion. The group evaluated both candidates on debt-reducing actions such as raising tax revenue and debt-increasing measures such as new spending.
Some of Harris’ more costly proposals include expanding the child tax credit; increasing federal spending for housing and health care; lowering taxes on tips; boosting tax breaks for child care and education; spending more on border enforcement and extending expiring tax breaks for households earning less than $400,000 per year.
Trump’s costlier proposals include tax cuts for corporations, increased military spending, higher outlays for border security and ending the taxation of tip income, overtime pay and Social Security benefits.
The group also evaluated low-cost and high-cost scenarios. While the numbers change, Trump would account for relatively more spending, less tax revenue and higher interest expenses than Harris under all scenarios.
Inflation is a big issue that splits along party lines
Inflation has emerged as the top economic issue for Americans, according to a new survey in which 41% of respondents ranked it at the top, but with respondents split sharply according to their political orientation.
Some 58% of Republicans cited inflation and high prices as the main economic concern, compared to 28% of Democrats. The results from Bankrate’s Politics and Economy Survey, conducted in mid-September, elicited responses from 2,000 people. Healthcare costs came in a distance second, cited as the top economic worry by 14%, and unaffordable housing was third at 11%.
“Even though the inflation rate has plummeted from a 2022 high, prices are still more expensive today than they were before the pandemic, continuing to impact consumers’ finances on everything from their ability to save for emergencies to their contributing enough money toward retirement,” Bankrate said.
Americans generally feel pessimistic about the economy overall, with 55% saying it’s going in the wrong direction compared to 32% sensing the economy is in good shape and 13% unsure.
Respondents by a slight margin said they felt former President Trump would be the best candidate for their personal financial situation, with Trump cited as best by 42% of respondents compared to 38% for Vice President Harris, with the rest saying neither is best or not responding.
How tariffs and China figure into the debate
Tariffs are a complex economic topic that might be beyond the scope of most voters. Still, Trump has made this a campaign issue by pledging to raise tariffs generally by up to 20%, and to 60% on Chinese-made goods.
Simply put, tariffs are taxes imposed by the government when foreign goods enter the U.S.
These added costs usually are passed on to consumers in the form of higher prices, which can be inflationary.
Conversely, the federal government does collect much-needed revenue from tariffs, and they enable U.S. companies to compete more effectively against foreign rivals. Tariffs have been imposed throughout the nation’s history and are a much older form of federal revenue than income taxes. But high tariffs can spark harmful, retaliatory trade wars, as in the 1920s and 1930s.
At any rate, many Americans likely don’t have a good understanding of tariffs. A recent survey found that bipartisan majorities support a general continuation of today’s relatively low current tariffs as long as other countries abide by the rules. The study by the University of Maryland also found that bipartisan majorities favor higher tariffs on China.
But this poll was a “consultation survey” whereby respondents first were given briefings for and against tariffs, with content reviewed for accuracy and balance. This format suggests that many of the respondents might struggle to draw informed opinions on tariffs without some coaching. But the format also helps to break down a complex topic into digestible bites. You can take the survey and learn more about tariffs. It takes about 15 minutes to complete.
Might both candidates be good for the economy and stock market?
Trump and Harris would leave very different marks on the economy and stock market, but could the next four years be strong, no matter who wins the White House? One economist thinks so, and he credits it largely to the advent of artificial intelligence and other entrepreneurial forces.
“Americans are apprehensive about (the AI) change, but they only need look at other transformational technologies of the past such as the mechanization of agriculture and industry, the advent of electricity and, more recently, the internet,” wrote Peter Morici, an economist and retired business professor, in an article for MarketWatch. “All of these innovations boosted U.S. growth and employment as new occupations emerged for workers.”
Morici expects Harris would support industries including AI, electric vehicles and solar energy while expanding social programs to help working-class families. Trump, he said, would rely more on market forces while keeping a lid on the corporate tax rate, raising tariffs and cutting taxes on overtime pay, tips and Social Security benefits.
Under either candidate, inflation could remain a problem, Morici said, but he still predicts economic growth and corporate profits will be "robust" and the stock market will flourish.
Reach the writer at russ.wiles@arizonarepublic.com.