Following the withdrawal of US President Joe Biden, current Vice President Kamala Harris could become the Democratic candidate in the presidential election on 5 November and run against Republican Donald Trump. The decision will not be made until mid-August, when the delegates of the Democratic Party nominate a candidate at their convention. However, it is very likely that Harris will be nominated. After Biden endorsed his deputy as a replacement candidate, the chairmen of the Democratic parties in the US states also backed Harris.
This means that Harris would also have to run in the election campaign with an alternative economic policy programme to Trump. Since Biden’s withdrawal, Harris has not commented on her economic plans. However, conclusions about her economic policy position can be drawn from previous statements she made. Overall, many experts expect her to essentially continue Joe Biden’s economic policy, albeit with a stronger focus on redistribution, consumer protection and clean energy. An economy under Harris could look significantly more progressive than under Biden, the New York Times wrote on Monday.
Harris likely to advocate redistribution
Harris is also likely to favour higher corporate taxes and tax relief for lower income groups. Joe Biden already urged to increase taxes for large companies and the super-rich earlier this year. His government’s draft budget for the coming fiscal year included a minimum tax of 25 per cent for people with assets of more than USD 100 million, as well as tax cuts for lower and middle income brackets.
Comparing previous statements, Kamala Harris could be an even more ardent proponent of higher corporate taxes than Biden. In the 2019 race for the presidential nomination, she proposed an increase of the corporate tax rate to 35 per cent, while Biden’s plans entailed a more modest increase to 28 per cent. At the time, Harris had also presented plans for huge aid packages and tax credits worth billions for lower income groups.
Following the withdrawal of incumbent US President Joe Biden from the race for the upcoming elections, Kamala Harris is considered the most promising candidate to enter the race against Donald Trump for the Democrats. © MANDEL NGAN / AFP / picturedesk.com
Trump relies on tax cuts
Like Biden, Harris’ tax plans drastically contrast with Trump’s policy of tax cuts. Trump recently reaffirmed his plans to cut corporate and income taxes. The former president recently even discussed completely abolishing income tax, but economists and political experts consider such a step to be unlikely.
During his first term in office, Trump had already promised that such tax cuts would provide a strong economic stimulus and therefore also increase government revenue. However, experts fear that Trump’s tax cuts will also have to be financed from debt, thereby further increasing the US budget deficit. Even during Trump’s time in office as president, his tax cuts went hand in hand with higher US debt. However, the debt also continued to rise under Biden, with the president having to use it to finance economic programmes during the pandemic, among other things.
Donald Trump was only recently officially nominated as the candidate for the November elections at the Republican Party convention. © JIM WATSON / AFP / picturedesk.com
Harris criticises Trump’s plans for tariff increases and protectionist trade policy
Like Biden, Harris will probably also position herself squarely opposed to Trump on trade policy issues. Trump once again wants to support his tax cuts with a protectionist trade policy and thus also higher tariffs. The former president wants to introduce punitive tariffs of at least 10 per cent on all goods imported into the US in order to reduce the US trade deficit. The tariffs on imports from China are likely to be significantly higher.
Harris recently warned against the Republican’s plans. Such tariff increases would lead to higher prices for energy, food and clothing, harming low-income families. Accordingly, she also clearly rejected a protectionist trade policy.
Harris likely to retain focus on clean energy and climate protection
Harris’ position on climate and energy is similar to those of Biden. Both are considered proponents of the switch to sustainable and clean energy sources. This year, Biden announced billions in funding to convert existing car factories to the production of electric cars. Biden also promoted the switch to electric cars with tax incentives and corresponding regulations. Trump, meanwhile, plans to reverse Biden’s measures in this area if he is elected.
Harris has also emphasised the importance of clean energy in the past and might possibly double down on her engagement in this area. Last year, she made her debut at international climate negotiations and announced a USD 3bn pledge to the Green Climate Fund (GCF). As Vice President, Harris has also been involved in implementing policies of environmental protection agencies. These address long-standing environmental justice issues, such as a multi-billion dollar programme to replace lead pipes and lead paint. Conversely, Harris could tough stance towards the oil industry.
The Vice President is rumoured to be close to the technology industry, being familiar with prominent technology managers and investors. However, she has also repeatedly pushed for stronger regulations in the tech industry in the past, and a number of tech companies are therefore hoping for greater deregulation from a Trump presidency. Cryptocurrencies have recently reacted to Trump’s rise in the polls with significant increases.