How Kamala Harris May Differ From Joe Biden On Pocketbook Issues

With the days of Bidenomics now numbered, voters are waiting to see what exactly the president’s preferred replacement would do for their finances. 

President Joe Biden announced Sunday he is dropping out of the presidential race, putting the spotlight on the candidate he endorsed to take his place, Vice President Kamala Harris.

“It seems likely that a Harris administration, should it come to pass, would support many of the economic policies pursued by the Biden administration,”  Michael Pugliese and Aubrey George, economists at Wells Fargo Securities, wrote in a commentary Monday. “Should Vice President Harris win the nomination, we will be watching closely to see what economic policy breaks she has with the current president, if any.”

With the tax code, national debt, and numerous other financial matters at stake in the election, there are many unanswered questions about what, if anything, Harris would do differently than her predecessor. However, her record may hold clues.

Hints From Previous Policy Proposals

Harris did propose several major tax and economic policies during her time as a senator from California and when she ran for president in 2020.

For example, in 2018, Harris introduced a bill that would establish a tax credit of $3,000 a year for individuals and $6,000 for married couples, a move that would tilt the tax code more in favor of lower income earners. Biden’s temporary expansion of the Child Tax Credit in 2021, which he sought to make permanent, similarly boosted the incomes of working and middle-class households, but only for people with children.

Notably, in 2019, Harris said if she were elected president she would repeal the Tax Cuts and Jobs Act of 2017, the series of tax cuts passed by former president Donald Trump. Whoever wins the presidential election will have to deal with the TCJA one way or another since many of its provisions expire in 2025.

The act cut taxes for corporations and high income earners, drawing criticism from Democrats, but also simplified the tax code and expanded the child tax credit. Biden, rather than calling to fully repeal the law, said he would not raise taxes for anyone making over $400,000, suggesting that the TCJA provisions benefitting lower and middle-income earners would stay in place.

Biden also proposed raising the corporate tax rate to 28% from its current level of 21%, whereas the full repeal that Harris proposed would make it revert to its pre-TCJA level of 35%.

For his part, Trump has said he would extend the entire TCJA. 

In 2019, Harris proposed a major healthcare reform, joining Bernie Sanders and other progressives in calling for medicare coverage to be extended to everyone regardless of age. Harris’s Medicare For All plan would have been paid for partly by a new tax on financial transactions, including 0.2% from every stock trade.

Big Shifts in Economic Agenda Unlikely

Whatever specific policies Harris favors, the broad outlines of the choice facing voters are unlikely to change, some analysts noted.

The Democratic side favors more social programs, tax breaks for low and middle-earners and higher taxes for the wealthy, while Republicans have argued for broader tax cuts, including for businesses and the wealthy. The two sides also differ on trade, with Trump having proposed across-the-board tariffs on imports, in contrast with Biden’s policy of narrow tariffs on certain products like Chinese electric cars. 

“We would not expect the Democrats’ fiscal and trade policy agenda to shift meaningfully in the event that Harris is the nominee,” Jan Hatzius, chief economist at Goldman Sachs wrote in a research note.