Harris wants to give families a big tax break for a new baby

Updated August 16, 2024 at 3:00 PM ET

Vice President Harris unveiled an economic plan Friday that focused on the high cost of housing, food and raising children — top expenses for voters pinched by years of rising prices.

The plan includes a major expansion of the child tax credit. Low- and middle-income families would receive up to $6,000 when they have a new baby. And Harris said he wants to restore the pandemic-era program that gave families up to $3,600 per child.

A larger child tax credit has also been proposed by Republicans. Vice presidential candidate Sen. JD Vance said Sunday he would like to see it expanded to $5,000 per child.

Polls have shown that President Biden has struggled to get credit for his efforts to lower prices, and many voters say they have more confidence in Republican presidential nominee Donald Trump on the economy — but polls also show voters are less critical of Harris on economic issues.

“The costs are still too high, and at a deeper level, for too many people, no matter how hard they work, it’s so hard to get ahead,” Harris said Friday in Raleigh, NC.

Harris’ plans would cost a lot. Her campaign did not say how much

The child tax credit is both popular with voters and effective in reducing the child poverty rate. But expanding the program would also be costly.

“It would be very expensive. The current child tax credit costs about $100 billion a year. This (proposal) would probably double that cost,” said Kevin Corinth, an economist at the American Enterprise Institute who has worked for the White House Council . of economic advisers during the Trump era.

The Harris campaign so far has not put a price tag on its plans.

Felicia Wong, executive director of Roosevelt Forward, a progressive advocacy group, said Harris’ proposals would require new spending. “The good news is that we certainly have this money in our country,” Wong said.

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“It’s a matter of raising taxes on the wealthy and corporations and changing our tax code across the board to make sure we can bring in that revenue and then pay for those investments,” she said.

Harris will focus on housing prices

Harris announced a tax cut proposal that her campaign said would lead to 3 million new housing units over four years, beating a proposal by the Biden White House to reduce the housing deficit by 2 million new and renovated homes .

Harris’ plan would provide unspecified tax incentives to homebuilders for homes aimed at first-time buyers and affordable rental housing. She proposed a $40 billion fund to help local governments finance development, up from a $20 billion proposal from the Biden White House. Like all spending, these proposals would depend on Congress’s willingness to fund them.

Harris said she would ask Congress to give first-time homeowners up to $25,000 toward their down payments — a plan her campaign said could help more than 4 million first-time buyers. That’s more generous than a plan Biden announced in this year’s State of the Union address, which would have given first-time homebuyers a $10,000 tax credit and helped about 400,000 first-time homebuyers. generation with prepayment assistance.

And she said she would support legislation to restrict tax breaks for corporate investors who buy homes, as well as a law that would bar rental property owners from buying algorithmic data that helps them raise rent prices.

Harris would crack down on corporations, her campaign says

Harris and Biden delivered campaign-style remarks Thursday about their efforts to lower prescription drug prices for people on Medicare. Like Biden, Harris is proposing that a $35 cap on the price of insulin be extended to everyone, not just seniors — as well as a $2,000 cap on out-of-pocket costs for prescription drugs.

Harris has argued that corporations are making too much money off consumers — a theme he foreshadowed on the campaign trail, noting his work on price fixing when he was California’s attorney general.

“A loaf of bread costs 50% more today than before the pandemic. Ground beef increased by almost 50%. Many of the big food companies are posting their biggest profits in two decades. And while many grocery chains are passing on these savings, others still aren’t,” Harris said.

Harris has called for a federal ban on price gouging in the food sector and said her administration will more aggressively investigate and pursue price-fixing in the meat supply chain.

That proposal is similar to an approach taken by the Biden administration, which said in September 2021 it would clamp down on price-fixing and enforce antitrust laws in the meat sector, as well as provide funding to smaller players to try to boost competition.

Harris’ plan would give the Federal Trade Commission and state attorneys general the authority to investigate corporations and impose penalties, her campaign said. Many large retailers have kept food prices high instead of passing the savings on to consumers, Harris said.

Kevin Hassett, a top Trump White House economic adviser, said some of Harris’ proposals would amount to “price controls” and could lead to supply shortages. He said Trump’s approach of cutting taxes, deregulation and boosting energy production would do more to tackle inflation.

“There’s not a lot of price gouging going on here with Safeways and Giants and 7-Eleven — they just have very, very, small margins,” Hassett told reporters on a conference call.

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