Harris, taxes, and inflation

Vice President Kamala Harris is now officially the Democratic candidate for president

With the Democratic National Convention now in the rearview mirror, Vice President Kamala Harris is now officially the Democratic candidate for president.

Following the convention, Harris is still seeing a slight bump in various polling. Considering she had a VP historic low of 28% move to a 41% approval rating as of Aug. 18; it's amazing what a media makeover can accomplish. 

Harris has made a number of economic policy statements in the past week but has provided little to no details regarding those policies.

What is she proposing?

Harris, in various speeches, has said she would implement a “federal price gouging ban” to control skyrocketing food prices. That ban would come with criminal penalties that could be levied against grocery stores.

Harris first made this policy proposal at her campaign stop in Raleigh, North Carolina JD Vance delivered the zinger after Harris' Raleigh event.

"Giving Kamala Harris control over inflation policy is like Jeffrey Epstein control over human trafficking policy,” said Vance.

The problems with this proposal are two-fold.

One, there is no grocery price gouging going on. High prices are tied to inflation and the fact that the cost to produce, transport, and sell food items is directly linked to increasingly high energy and gas costs.

Two, nowhere in the history of commerce has a ban liked this worked. In fact, it’s had the opposite result, leading to scarcity, black markets, and things like bread lines.

Publishing magnet Steve Forbes called Harris' economic plan a “Soviet-style system.”

CNN reported economists say this proposal will do the opposite of creating competition in the market place, that it’s not a “sensible policy,” and that “there’s no upside…”

"We've seen this kind of thing tried in lots of other countries before," Washington Post editorial board's Catherine Rampell said during a CNN segment after the speech. "Venezuela, Argentina, the Soviet Union, etc. It leads to shortages. It leads to black markets."

The CNN appearance followed Rampell's opinion article torching the Harris price control proposals.

"It’s hard to exaggerate how bad this policy is. It is, in all but name, a sweeping set of government-enforced price controls across every industry, not only food. Supply and demand would no longer determine prices or profit levels. Far-off Washington bureaucrats would,” wrote Rampell. “The FTC would be able to tell, say, a Kroger in Ohio the acceptable price it can charge for milk.

At best, this would lead to shortages, black markets and hoarding, among other distortions seen previous times countries tried to limit price growth by fiat. (There’s a reason narrower “price gouging” laws that exist in some U.S. states are rarely invoked.) At worst, it might accidentally raise prices."

Some of the same economists in the CNN report made similar statements to the NY Times. The same criticisms of this kind of policy came from the Wall Street Journal.

FOX News’ Jesse Waters segment on this policy was pretty spot on:

More To The Story

Taxes, taxes. Spending, spending.

Harris also wants to raise taxes, not just on corporations, but the general public by allowing the Trump tax cuts to expire.

Harris wants to see a 28% corporate tax, a 44.6% capital gains tax, and a 25% tax on unrealized gains.

These type of tax policies are similar to what is found Biden's $7.4 trillion budget for fiscal year 2025. The word "tax" is found 247 times in the 188-page budget plan.

Hit page 44 of Biden’s budget, to the section labeled "cutting the deficit by expanding America's productive capacity and promoting tax fairness.” Under this section, Biden wants a minimum corp. rate of 21% and a maximum of 28%. For context, the corporate rate under Trump was 10%.

"The Budget would set the corporate tax rate at 28 percent, still well below the 35 percent rate that prevailed prior to the 2017 tax law. In addition, the Budget would raise the Inflation Reduction Act’s corporate minimum tax rate on billion-dollar corporations from 15 percent to 21 percent, ensuring the biggest corporations pay more of their fair share." 

The Tax Foundation said Biden’s budget overall was a mess, but that the corporate tax policy, which Harris is following, would have “negative effects.”

Here’s an excerpt, but read the whole thing:

"We estimate the tax changes in the president’s budget would reduce long-run GDP by 1.6 percent, the capital stock by 2.7 percent, wages by 1.1 percent, and employment by about 666,000 full-time equivalent jobs. The budget would decrease American incomes (as measured by gross national product, or GNP) by 1.3 percent in the long run, reflecting offsetting effects of increased taxes and reduced deficits, as debt reduction reduces interest payments to foreign owners of the national debt.

Raising the corporate income tax rate to 28 percent is the largest driver of the negative effects, reducing long-run GDP by 0.6 percent, the capital stock by 1.1 percent, wages by 0.5 percent, and full-time equivalent jobs by 128,000.

Additionally, this is what Biden’s budget says about raising taxes by ending the Trump tax cuts, a move which Harris also appears to be using. The emphasis added is mine:

“The 2017 tax law lowered rates for the wealthiest Americans, delivering massive tax cuts to the top one percent. The Budget repeals those cuts, restoring the top tax rate of 39.6 percent for single filers making more than $400,000 a year and married couples making more than $450,000 per year."

The taxes Harris wants to extract may be how she plans to pay for her “$25,000 down payment for first time homebuyers” promise. The promise also included a pledge to spend $40 billion in taxpayer funds to local governments to boost “affordable housing.”

Again, there are no specifics with these promises and there has been pushback, with Republicans and the Trump campaign calling it “inflationary spending” that will make inflation worse.

Matt Gorman, a former aide to Sen. Tim Scott (R-SC), gave a reality check on the $25,000 promise in a CNN interview.

“But look, when it comes to the 25K, I mean, you just added $25,000 to every price, on every home price in the country because if you’re giving that away, essentially for free, people will add it into the price,” Gorman told “CNN News Central” co-host Boris Sanchez.

Now, after absorbing all of this, realize that Biden's Commerce Secretary Gina Raimondo doesn't know what the Bureau of Labor Statistics (BLS) is.

During an interview at the DNC, Raimondo was asked about the massive 818,000 downward revision in the BLS' report this past week. She tried to deflect back on Trump and said, "I'm not familiar with that."

Even More To The Story

Raimondo’s statement is worrisome, but past remarks on inflation by Harris are a clue as to why she’s not taking questions from reporters about her economic plan.

At a press conference in Nov. 2021, Harris was asked about inflation. She pretty quickly devolved into one of her famous “word salads,” repeating phrases over and over with no actual answer to the question asked.

This fall it will be two years since she took that question with prices and inflation having become far worse.

Here's Harris in 2023, after the signing of the Biden-Harris "Inflation Reduction Act," where yet again, she is either unable or unwilling to answer the questions posed.

Bonus clip: New chief same as the old chief?

Harris meanders to her plane and blow off answering reporter questions. This video is from Friday, Aug. 23 as she heads back to Washington, D.C.