Kamala Harris' Economic Agenda: A Comparison to Canadian Experience

Strategic Insights -

As the U.S. presidential campaign approaches Election Day on November 5, it's essential to examine Kamala Harris' proposed economic stewardship, particularly given Canada's significant trade relationship with the U.S. Harris has outlined her economic plan, which includes measures inspired by Canadian experience, such as expanded child tax credits and down payment support for first-time homebuyers. However, her approach to trade, tariffs, and taxes differs significantly from that of her Republican counterpart, Donald Trump.

Key Takeaways:

  • Harris would retain existing U.S. tariffs on Chinese goods, unlike Trump, who plans to impose a 10% tariff on all U.S. imports, including from Canada.
  • The Harris campaign estimates that Trump's planned tariff regime would cost the average American household $5,400 per year in higher prices for clothing, over-the-counter medications, and other imported goods.
  • Harris proposes an expanded child tax credit of up to $4,800 per child and an $8,000 credit for newborns, building on a U.S. experiment that saw a record-low child-poverty rate of 5.2% during the pandemic.
  • Her down payment support for first-time homebuyers, up to $33,000, is criticized as inflationary, but Canada's inflation rate has continued to fall since adopting a similar policy.
  • Harris aims to cap out-of-pocket expenses for all medications at $2,700 per year, a more ambitious approach to pharmacare than Canada's current regime.
  • She proposes federal legislation to outlaw price-gouging, which would be difficult to enforce but has the support of prominent economists like Mark Zandi.
  • To pay for her proposed social benefits, Harris would increase the U.S. corporate tax rate to 28% from 21%, mirroring Canada's initiatives to raise taxes on wealthy Canadians.
  • She would apply a minimum tax of 25% on the income of the richest 0.01% of U.S. households and tax unrealized capital gains of Americans with a net worth exceeding $135 million.

Statistics:

  • The Harris campaign estimates that Trump's planned tariff regime would cost the average American household $5,400 per year in higher prices for clothing, over-the-counter medications, and other imported goods.
  • The U.S. child-poverty rate fell to a record-low 5.2% during a U.S. experiment with expanded child tax credits during the pandemic.
  • The Canadian Child Benefit has helped lift an estimated 430,000 children from poverty since it was introduced in 2016.
  • Canada's inflation rate was 2.5% in July, following the implementation of similar policies in the U.S.
  • Harris proposes an increased U.S. corporate tax rate of 28% from 21%, mirroring Canada's initiatives to raise taxes on wealthy Canadians.
  • The proposed tax regimes of Harris and Trump would see the U.S. government collect roughly the same projected $85 trillion in tax revenues over the next decade.

Sources:

  • "By sharp contrast, Donald Trump, the Republican presidential nominee, would impose a 10 per cent tariff on U.S. imports from all countries, including Canada and other U.S. allies." (Source: The Star)
  • "Harris said that Trump 'wants to impose what is in effect a national sales tax on everyday products and basic necessities that we import from other countries. That will devastate Americans.'" (Source: The Star)
  • "The Harris campaign uses the higher amount because Trump has lately mused about toughening his planned protectionism, imposing a 20 per cent surtax on all non-Chinese imported goods." (Source: The Star)
  • "During a U.S. experiment with expanded child tax credits during the pandemic, which has since lapsed, the U.S. child-poverty rate fell to a record low of 5.2 per cent." (Source: The Star)
  • "That policy has worked in Canada, as well, where the Canada Child Benefit has helped lift an estimated 430,000 children from poverty since it was introduced in 2016." (Source: The Star)