I’m an Economist: 3 Reasons I Believe Harris’ Opportunity Economy Could Help Retirees

Democratic presidential candidate US Vice President Kamala Harris speaks during a campaign event at Veterans Memorial Coliseum at Alliant Energy Center in Madison, Wisconsin, USA, 20 September 2024.
KAMIL KRZACZYNSKI/EPA-EFE / Shutterstock / KAMIL KRZACZYNSKI/EPA-EFE / Shutterstock

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Recently, U.S. Vice President Kamala Harris spoke about her plan to lift up the middle class and working people of America as she runs for president.

“I believe in the ambition, the aspirations, and the dreams of the American people. And that is why I imagine and have actually a plan to build what I call an opportunity economy,” she said.

Although this plan seems to be primarily geared toward working individuals, it’s possible that it could benefit retirees as well. 

To find out how and the exact impact it could have, GOBankingRates spoke with Milton Ezrati, author of Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live and chief economist at Vested.

Here’s how Harris’ “opportunity economy” could work and how it might help retirees.

Kamala Harris’ Opportunity Economy at a Glance

Harris advocates for finding ways to ensure everyone — no matter who they are or where they live — gets the same opportunity to succeed. This is a major cornerstone of her presidential campaign.

But what exactly is her “opportunity economy”? Here are the key points and the main issues it would tackle:

  • Lower taxes for middle-class households with kids: Harris’ plan is to restore the expanded child tax credit, which would provide $3,600 per child to working-class families. She has also proposed a new credit of $6,000 to help low- and middle-income families with expenses for a newborn child.
  • Reduced taxes for working Americans: The plan would also be to expand the earned income tax credit, which applies to those working low-income jobs, but would now include those who don’t have kids. This credit would reduce their annual taxes by as much as $1,500.
  • More affordable healthcare: Harris’ proposal further entails reducing taxes so that working-class Americans can better afford health insurance on the ACA Marketplace. This could save them roughly $700 a month — or $6,000 a year — on their insurance premiums.
  • Lower prescription and home care costs: According to her official campaign site, Harris also intends to “direct her Administration to crack down on anti-competitive practices that let big corporations jack up prices and undermine the competition that allows all businesses to thrive while keeping prices low for consumers.” This could involve capping prescription medication prices for all Americans.
  • Housing assistance to make homeownership more affordable: If elected, Harris has proposed up to $25,000 in down payment assistance for first-time homebuyers. 
  • Small-business support: Harris plans to boost the number of small business applications to 25 million during her first term. To ensure this happens, she has proposed a startup expense tax deduction. She also announced her intent to “[increase] the share of federal contracting dollars going to small businesses.”

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Further, Harris has repeatedly said that under her administration, no American earning less than $400,000 a year would have to pay more in new taxes. This could benefit over 100 million people.

So, how does all of this help retirees? Here are the most likely ways.

Certain Tax Credits May Help a Small Group of Retirees (at Least Indirectly)

Some of the tax credits noted in Harris’ “opportunity economy” could benefit some retirees, but it might not be that many.

“She is proposing generous child tax credits, which are applicable, I suspect, to only very few retirees, except maybe indirectly,” Ezrati said. “An enlargement of the earned income tax credit would help only that small proportion of retirees who are still involved in the workplace and toward the bottom of the income distribution.”

The same goes for the housing support. While it could benefit a select few, it’s more likely that it won’t impact retirees much.

“Her support for first-time homebuyers — $25,000 help with the downpayment and a $10,000 tax credit — would seem to aim more at the younger part of the age distribution,” Ezrati said. “I have no idea how many retirees qualify as first-time buyers and if they do are interested in it. I suspect, however, that it is small.”

Those Who Own Startups Could Benefit

A key part of Harris’ agenda is to help small businesses, which she views as the backbone of the American economy. Again, it’s possible — but not very likely — that this could help retirees.

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“The $50,000 for startups could benefit retirees, but I doubt a big proportion are involved in startups,” Ezrati said.

To clarify, there’s already a $5,000 tax credit for small businesses. Harris’ proposal is to increase it to $50,000 so that more small businesses can launch and expand — and the economy can ideally flourish as a result.

Lower Medical Costs Could Be a Significant Boon

Perhaps the most likely — and biggest — impact of Harris’ “opportunity economy” on retirees would be in regard to healthcare costs.

Among other things, Harris’ goals include:

  • Capping the cost of insulin to $35
  • Bringing down the cost of prescription drugs so that out-of-pocket expenses never exceed $2,000 (for everyone — seniors and not)
  • Cracking down on pharmaceutical companies seeking to profit off consumers through higher costs or a lack of transparency
  • Increase the speed of Medicare negotiations so that prescription medications fall in price.

“Prescription drug price caps and maximum expenses would certainly help retirees, even the wealthiest,” Ezrati said.

Retirees Could Benefit Just Like Everyone Else

Ultimately, Harris’ “opportunity economy” could help a lot of people, just in different ways.

“In general, most of Harris’ ‘opportunity economy’ is aspirational,” Ezrati said. “We all want to see costs come down and income spread more equitably. The devil is in how this is done, and so far we have had precious little of that. [T]o the extent that her administration accomplishes these things, retirees would benefit along with everyone else.”

Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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