The Harris Economic Agenda Is a Plan to Impoverish America

The new leader of the Democratic Party, Vice President Kamala Harris, has unveiled a slate of economic proposals that would do nothing but harm the American economy and make Americans poorer.

In case you haven’t been following along, Harris has endorsed price-controls for grocery stores, subsidizing housing demand with $25,000 credits to new home-buyers, raising the corporate income tax to 28 percent, and adopting a 45 percent tax on longterm capital gains. Harris even went so far as propose a 25 percent tax on unrealized capital gains for some high net-worth individuals.

If Harris set out to craft a set of policies that would weaken the American economy, slow growth, reduce employment, scare away investment, and generally leave all Americans poorer, she couldn’t have done a better job. Her economic agenda is a recipe for collapsing the American economy.

The harebrained price-controls scheme rightly earned Harris’s economic platform the moniker “Kamunism,” since those policies have been a part of almost every failed communist regime. Her proposal is less a realistic policy idea and more a political attempt to shift blame away from the inflation-ridden Biden-Harris economy and onto “greedy” corporations. If the Washington Post’s editorial board is any indication, somewhat normal liberals are even balking at the idea, so there’s a good chance that particular idea dies with the news cycle.

However, Harris’s tax proposals reflect the longstanding sentiment of the Bernie Sanders / Elizabeth Warren wing of the Democratic Party that millionaires, billionaires, and corporations have some secret hoard of wealth that could make everything better in America if only it belonged to the government. Given the rise of Tiktok politics and the unthinking embrace of socialist and communist ideas by young Americans, Harris’s tax proposals are far more likely to become reality — and if they do, it’ll spell disaster.

Taxing unrealized capital gains would lead to untold distortions and perversities, and likely shrink government revenues as investors flee the U.S. In Norway, when the left-wing government adopted similar proposals to promote “fairness” by hiking taxes on the wealthy, the wealthy left. The result was, paradoxically, that a policy adopted to increase government revenues actually resulted in decreased tax revenues. The same dynamic would play out in the U.S., where, for the time being at least, the wealthy are still free to exit the country for more desirable tax jurisdictions.

The proposal to raise the corporate income tax rate from 21 proposal to 28 proposal is similarly misguided and counterproductive. More so than wealthy individuals, corporations are free to relocate to more favorable jurisdictions. But that’s just the tip of the responses you’re likely to see if the idea becomes reality. It’s important to understand that corporations don’t really pay taxes the way people might think. Instead, the burden of corporate taxes falls on people—workers, consumers, and shareholders. Wherever a corporate tax rate falls on the spectrum from zero to one-hundred percent doesn’t change this fundamental fact: corporations don’t pay taxes; only people do.

When the government raises corporate taxes, it cuts into the profits that businesses make after taxes. Liberals mistakenly believe that corporations will just accept reduced margins out of the goodness of their hearts. That’s not what actually happens. Instead, they find other ways to keep their profits up. This leads to less investment in new projects, slower growth, and, ultimately, less economic expansion. Research by Ergete Ferede shows that a 1 percent decrease in corporate tax rates can increase economic growth by 0.1 percent to 0.2 percent. On the other hand, raising taxes slows growth because businesses are less likely to invest when facing higher tax burdens.

The effects Harris’s economic schemes won’t stop at slower growth. Higher corporate taxes also lead to fewer jobs and lower wages. When companies face higher costs, one of the first things they do is cut labor expenses. This might mean outsourcing jobs other countries, hiring fewer people, or even layoffs.

As the job market worsens, the same workers competing for fewer jobs will also face higher consumer prices. Again: corporations don’t pay taxes; only people do. And consumers will pay for an increased corporate tax rate as the prices they pay for goods and services increases. The result is that consumers, especially those with fixed or low incomes, have less buying power. In this way, corporate taxes act as a hidden tax on the public, hitting the most vulnerable people the hardest. Ironically, the Bernie Bros crowing loudly that the “rich corporations” need to “pay their fair share” will almost certainly bear the burden of their coveted tax increases when prices go up.

The idea that raising corporate taxes will generate more money for the government is also flawed. While it might bring in more revenue in the short term, the long-term effects have actually been shown to decrease tax revenues. (There was once a Democrat who understood this dynamic, but he got shot in the head.) The logic here is simple: a higher tax rate would push businesses to move their operations and profits overseas, shrinking the tax base. The effect could be severe given the level of tax increase Harris’s is proposing. A combined federal and state corporate tax rate of 32.2 percent would make the U.S. one of the highest-taxed economies, making it less attractive for both domestic and foreign investment.

Even Maine’s rising high school seniors at Dirigo State should be able to see through the flimflam on offer from the Harris-Walz campaign. In our state, the impacts of Harris’s proposals would be even more acutely felt, as the state already ranks among the highest taxes in the U.S. If we add to that dynamic a new tax on unrealized capital gains, the flight of wealthy individuals from Maine’s coastal communities could devastate Maine’s economy, with harsh consequences for the working people. Maine’s elected officials, especially Democrats standing for re-election like Rep. Jared Golden and Rep. Chellie Pingree, should immediately denounce Harris’s stupid economic proposals, or else explain why they support this pro-poverty agenda.