Since she started running for president two weeks ago, Vice President Kamala Harris has risen quickly in the polls and now leads former President Donald Trump across the country, according to groups that collect polls.
As she gets ready for next week’s Democratic National Convention in Chicago, the California Democrat has more work to do to win over voters in swing states, who tend to be more conservative than the average American.
Usually, presidential candidates try to win over undecided voters by softening their economic views. But Chris Meekins, a Washington policy analyst at Raymond James, says Harris might be better off not making any detailed plans at all.
“Their goal will be to talk about moving forward and criticise Trump’s policy ideas,” Meekins told MarketWatch. “But they won’t want to set a broad agenda that Republicans can then work to destroy.”
The Harris campaign told MarketWatch that the vice president has given up on policy ideas she supported in 2019 when she was running for the Democratic nomination and then dropped out of the race in December of that year. Some of the ideas were to ban private health insurance under Medicare for All, stop fracking, and guarantee jobs at the federal level.
On Saturday, the vice president told reporters that her policy platform would be released this week. It would be centred on “what we need to do to bring down costs and also strengthen the economy.”
The Harris campaign will also try to make people dislike Trump’s economic record and his plan to put a tax on many goods that Americans bring in from other countries.
A spokesman for Harris-Walz told MarketWatch, “What middle-class families need is steady economic stewardship, not chaotic ranting lies.”
“Donald Trump had the worst record on jobs of any modern president. He also presided over some of the worst days in the history of the stock market while spending his time in office giving money to rich friends who sent American jobs overseas,” Moussa said. It is agreed by economists that his plans would “supercharge” inflation and make things more expensive for working families by $2,500 a year.
The Trump campaign has said that their plans for the economy will give people more money to spend, not less. Scott Bessent, a hedge fund manager, told MarketWatch last month at the Republican National Convention in Milwaukee that it was “absurd” to think that Trump’s policies would cause prices to rise. People think that Bessent could become Treasury secretary if Trump wins in November.
Tax rules
Meekins wants Harris to move closer to the middle on tax policy, but he doesn’t think she will give up on her party’s recent calls for big new taxes on investment income.
If the Democrats win November, he said, “I think you look at what she has supported in public life over the last decade or more and assume that’s probably the direction she’s going to go.” “This is by far the most progressive Democratic ticket we’ve seen in a long time.”
Over the weekend, Harris did bring up the idea of not taxing tips for service and hospitality workers. This is similar to a plan Trump made weeks before, but economists have mostly criticised it.
Trump said on Truth Social on Monday, “Kamala Harris has changed her mind on almost every policy she has lived by and supported her whole career, from the Border to Tips.” “She sounds a lot like Trump and copies almost everything he does.”
Many of the other ideas in President Joe Biden’s budget from earlier this year have made business people very angry.
The Biden budget called for new taxes of $3 trillion to $4 trillion on rich people, businesses, and corporations. One controversial idea was to tax families making more than $100 million a year on their unrealised capital gains as income.
It was also made clear in the budget that Democrats would not support a law that would raise taxes on families making less than $400,000 a year.
A person from Harris’s campaign told MarketWatch that investors should look at the most recent budget and not Harris’s positions before she was vice president to figure out what policies she wants to see.
In that budget, the top tax rate for businesses is going to be raised from 21% to 28%. Before the reform in 2017, it was 35%. The change was very good for big businesses.
A senior earnings analyst at FactSet named John Butters says that the average effective tax rate for S&P 500 SPX 0.20% companies dropped from 31.2% in 2017 to just 20% in 2018.
A 2018 Bloomberg study found that the changes to the tax law saved S&P 500 companies $12.8 billion in taxes in the first quarter that they were in effect.
Critics pointed out that companies mostly used their tax savings to buy back their own shares, not to grow their businesses and hire more people as had been hoped.
Meanwhile, some business leaders have said that higher taxes might not be such a bad thing if it means stable leadership. They point out that the economy and stock market have done well under Biden’s watch.
This is what Congress thinks
Henrietta Treyz, an economic policy analyst at Veda Partners and a former staff member on the Senate Budget Committee, told MarketWatch that investors should focus less on what Harris has publicly supported in the past and more on what Congress is willing to accept when they negotiate next year to extend the tax cuts that were put in place in 2017.
Treyz suggested that investors look at a deal made in 2021 in the House Ways and Means Committee, which is controlled by Democrats, to see what kinds of tax hikes Democrats in Congress are willing to accept.
The bill would have raised the top tax rate for businesses from 21% to 26.5% and the top rate for individuals from 37% to 39.6%. It would also have raised taxes on capital gains for people making more than $500,000 and added a 3% surcharge tax for people making more than $5 million.
It planned to spend that money on paid family and child leave for all U.S. workers, a bigger tax credit for children, and more child and elder care workers and facilities.
“This is a plan that Democrats worked on for years, and there wasn’t much opposition in the House,” Treyz said. “If the Democrats win the majority, that will be their starting point.”
A March poll by Bloomberg of registered voters in swing states showed that 69% wanted to raise taxes on people making more than $400,000. This strategy is backed up by polls.
Making things right with business
According to Tobin Marcus, head of U.S. policy for Wolfe Research and former aide to Vice President Joe Biden, investors shouldn’t expect Harris to cater to them by publicly rejecting policies like a buyback tax that is five times higher or a tax on billionaires’ unrealised capital gains. This is because many American voters are in a populist mood.
Marcus told MarketWatch, “I don’t see much reason for her to back away from the different investment tax policy proposals that Biden put forward; they won’t pass Congress anyway.”
“They’re not really about the election.” He also said, “I don’t think a lot of voters are around saying, ‘I’m afraid Harris is going to tax unrealised capital gains or raise the corporate rate.'”
Marcus said that Harris’s campaign will try to reassure business leaders that her regulators would be more open to business and interested in what they have to say by using surrogates.
He brought up an interview with Harris supporter and Maryland Gov. Wes Moore not long ago.
Moore, a Democrat, told CNBC last week that a future Harris administration will and must handle regulatory issues such as antitrust enforcement in a different way. This is a big difference of opinion between the business community and the Biden administration.
Moore said that a Harris administration would deal with antitrust issues in a “different way” than the Biden administration. Harris might not fire enforcers like Lina Khan, Chair of the Federal Trade Commission, or Jonathan Kanter, who works for the Justice Department.
Raymond James’s Meekins says that these small steps may be all the business community can hope for at a time when many Democrats and Republicans are sceptical of corporate America.
He said, “I don’t think either party will care about whether the business community is happy with them in this campaign.” “And it will be awkward to find out what Harris really wants to do.”
