I’m an Economics Expert: 4 Ways Kamala Harris’s Proposed Policies Could Impact Middle-Class Wallets
Written by
Kerra Bolton
Edited by
T. Woods
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Vice President Kamala Harris recently unveiled a series of economic proposals aimed at reducing costs for common expenses while making the American Dream accessible to more people.
“These policies are focused on improving the lives of working people and creating a path to the middle class for Americans who have been locked out of economic opportunity,” said Frank Altman, author of “A New Capitalism: Creating a Just Economy That Works For All” and the founder of Community Reinvestment Fund, USA.
Altman explained, “Her proposals start with a middle-class tax cut that will put more money in the hands of strapped families.”
GOBanking Rates spoke to Altman and other economics experts about the four ways Harris’ proposed policies could impact middle-class wallets.
Your Grocery Bill
Food prices rose by 2.2% since last year, according to the latest Consumer Price Index (CPI) data.
Rising grocery bills affect low-income families the most because they spend an average of 30% of their money on food.
Harris said if she were elected, she would urge Congress to set federal limits on price increases for food producers and retailers. She also proposed using government regulators to constrain the mergers and acquisitions among large food industry businesses the vice president argues have contributed to higher food prices.
“She blames the high cost of food on price gouging, which flies in the face of the economic data,” said Joel Griffith, an economic policy research fellow at the Heritage Foundation. “Producers and the food industry have actually been absorbing these inflationary costs.”
Griffith also said that grocery stores are operating at a 1.6% profit margin and Kroger, the largest traditional supermarket chain, saw their profits decrease by nearly 2%.
In addition, according to a study from the U.S. Government Accountability Office, a congressional watchdog, the only way the federal government can influence food prices is by loosening regulations such as allowing producers to divert food made for restaurant consumption to go to grocery stories. Or the United States Department of Agriculture (USDA) could provide funding to help meat and poultry processors expand operations and fertilizer manufacturing.
Your Mortgage or Rent
Affordable housing remains an issue for most Americans.
Over three-quarters (77%) of the nation’s families can’t afford a median-priced home in the United States, which is nearly $500,000 in 2024.
Harris called for constructing 3 million new housing units over the next four years to ease what she says is a “serious housing shortage in America.” If elected, Harris said she would promote legislation creating tax incentives to builders to construct “starter homes” for first-time buyers.
Harris also proposed:
- Providing $40 billion in federal funding for businesses building affordable rental housing units.
- Offering $25,000 in downpayment assistance to help renters buy their first home.
- Repurposing some federal land to build new affordable housing.
- Limiting the number of investors who buy up homes in bulk and curbing price-setting tools Harris said encourages collusion to increase profits among landlords.
“We recognize that housing affordability is an issue – we don’t have enough supply,” Griffith said. “However, government subsidies run up housing costs. By distributing $25,000 to potential homebuyers, we’re going to end up borrowing and printing money. It’s going to drive up costs further.”
Your Medical Bills
About 1 in 12 Americans have unpaid medical bills of at least $250, hitting southerners and those in rural areas the most, according to a recent study from the Peterson Center on Health Care and the Kaiser Family Foundation (KFF).
Harris recommended accelerating Biden-era initiatives that authorized Medicare and other federal agencies to negotiate with drugmakers to lower the cost of prescription drugs. The policy seeks to lower some of the most expensive and commonly used drugs by roughly 40 to 80%, starting in 2026.
The Vice President also pledged to work with states to cancel $7 billion of medical debt for up to 3 million low-income Americans.
Your Taxes
Harris has been consistent in her tax proposals. For example, she proposed making permanent a $3,600 per child tax credit approved through 2025 for eligible families. The Vice President also wants to offer a new $6,000 tax credit for families with newborn children.
“These tax credits dramatically reduced childhood poverty during the COVID pandemic,” Altman said. “Low-income communities will also benefit from these measures.”
Finally, Harris wants to expand the Earned Income Tax Credit for some frontline workers by up to $1,500 and reduce taxes on healthcare plans offered on the Affordable Care Act (ACA) marketplace.
“The federal government is facing a fiscal crisis and not addressing the problem means there will be larger consequences in the not-too-distant future,” said Wayne Winegarden, Ph.D Senior Fellow, Business and Economics at Pacific Research Institute.
Winegarden continued, “These consequences will include higher interest rates that will harm housing affordability (that will harm housing affordability), higher middle class tax burdens (a necessity to raise sufficient funds) and fewer income growth opportunities (due to a more rigid economy).
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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