As Kamala Harris gives her DNC speech, here's how her plans - and Trump's - could affect your money

MW As Kamala Harris gives her DNC speech, here's how her plans - and Trump's - could affect your money

By Victor Reklaitis

MarketWatch's guide to competing Democratic and Republican economic proposals - and what they could mean for your budget, your investments and more

Democratic presidential nominee Kamala Harris is due to give her much-anticipated speech at her party's convention in Chicago tonight, and she's sure to touch on pocketbook issues like inflation and taxes.

What could her policies mean for your finances? And what has Republican nominee Donald Trump proposed?

Here's a guide to key aspects of each White House hopeful's economic plans, as reported by MarketWatch journalists.

Inflation

Harris this month has centered her inflation-fighting efforts on preventing price gouging by big companies, though that stance has faced pushback from skeptics. The vice president has proposed a federal ban on price gouging on groceries and other food items PBJ, along with close scrutiny of proposed mergers between big food companies.Trump has promised to fight elevated prices in part by unleashing U.S. energy XLE production, although domestic oil CL00 BRN00 production has already reached record levels under the Biden-Harris administration. The former president and his fellow Republicans also have pledged to combat inflation through deregulation and eliminating wasteful spending.

The biggest surge in U.S. inflation in 40 years came during the Biden-Harris administration, helping to keep President Joe Biden's approval ratings at low levels, even as inflation has eased this year. Economists cite a number of drivers for the increase in inflation, including massive government spending, first by Trump and then by Biden, to cope with the economic fallout from the COVID-19 pandemic; supply-chain problems during the pandemic; the Federal Reserve keeping interest rates too low for too long; and stimulus policies enacted in other countries.

Related: Trump's immigration plan could add to national debt, fueling inflation and market jitters

Taxes for companies and paper profits

Harris and her fellow Democrats are calling for a 28% corporate tax rate and for quadrupling the 1% tax on stock buybacks - echoing proposals made by Biden. Her campaign has said she supports the tax increases put forth in Biden's most recent budget proposal, which included a controversial plan to tax unrealized capital gains as income for those with wealth of more than $100 million.Trump's signature legislative achievement while in office was a 2017 tax-cut package that padded corporate profits, dropping the corporate tax rate to 21%, and helped power stocks SPX to record highs. As MarketWatch has reported, if he's elected again, investors may well be treated to a sequel, given that Trump has proposed cutting the corporate tax rate to 15%.

Whether it's Harris or Trump, the next president is expected to negotiate with Congress over how to address a range of 2017 tax changes for corporations and households that are set to sunset in 2025. "I view the 2025 expiring tax provisions as this hurricane we already see on the radar," one expert told MarketWatch.

Tariffs

The Biden-Harris administration has maintained many Trump-era tariffs and rolled out new levies on Chinese products, such as on that nation's electric vehicles NIO LI. At the same time, the Harris campaign has criticized Trump for proposing 10% to 20% tariffs, an apparent escalation of his prior plan for a 10% across-the-board tariff, saying they would cost U.S. families around $3,900 a year, even as households are already dealing with elevated prices.Trump - known while in office for his trade fights with China and other nations that often weighed on markets - said last week during an economic speech in North Carolina that he would aim for "10% to 20% tariffs on foreign countries that have been ripping us off for years." In addition, the former president has proposed 60% levies on Chinese imports. Some Trump allies have said they're concerned because any tariffs would ultimately be paid by American consumers and businesses, and they've expressed hope that levies would simply be used as leverage to get better trade deals with other nations.

See: 'I'm hopeful the tariffs will be used as leverage': Trump's allies discuss his economic plans

Also read: Trump's tariffs could overshadow the benefits of his tax cuts, economists say

Lack of affordable homes

Harris has called for the construction of 3 million homes over the next four years, powered in part by a tax incentive for builders of starter homes and a new $40 billion innovation fund. In addition, she wants to give $25,000 to first-time home buyers, even as critics say such aid would boost demand and drive prices higher.Trump on Monday reportedly said he might offer aid to prospective home buyers who are struggling to afford a down payment. He and his fellow Republicans have called for helping home buyers in part by opening up limited amounts of federal land to development, as well as by cutting regulations that raise housing costs. "On the Republican side, there's more of a recognition that this is a state and local issue," one expert told MarketWatch.

Price of gas and other fossil fuels

Harris mentioned the pain of paying for gasoline and other essentials during an economic speech last week, but she hasn't said a great deal about fossil fuels in her first month as a presidential nominee. The Harris campaign has said she no longer opposes fracking, after she came out against the drilling technique during her run for president in 2019. Even so, a Harris administration is widely expected to have a more restrictive stance on offshore and onshore production of oil and natural gas NG00 than a second Trump administration, as Cornerstone analysts have noted. But a top economic adviser to the Biden-Harris administration talked up the administration's track record on energy last week, noting that officials responded to rising gasoline prices RB00 with the largest-ever release from the Strategic Petroleum Reserve - and also coordinated reserve releases by other countries. The head of a lobbying group for the U.S. oil and gas industry last month praised Trump's track record on supporting extraction, even as he expressed worries about a second Trump administration's tariffs. "The broad policy that President Trump brought to the table was a real focus on increased American development of our resources, and I think the opposite has been true of the Biden administration," Mike Sommers, CEO of the American Petroleum Institute, told MarketWatch.

Read more: Trump might deliver lower oil prices but 'mixed' performances for oil and gas stocks

$7,500 EV tax credit

Harris this month has said she was proud to cast the deciding vote in the Senate for Democrats' Inflation Reduction Act of 2022, which delivered federal tax credits of up to $7,500 for buyers of electric vehicles. The Biden-Harris administration has made support of EVs KARS DRIV a key part of its policies and rhetoric, such as by backing a tailpipe-emissions regulation that Republicans have attacked as an "EV mandate."Trump said Monday that he hasn't made any final decision yet on whether he would repeal or limit the $7,500 EV tax credit but reiterated that he plans to rescind the emissions regulation. Trump has criticized the range of EVs but has also described EVs as "incredible," while adding that the U.S. must also have gasoline-propelled cars. He has praised Elon Musk, the CEO of EV pioneer Tesla TSLA, who has endorsed Trump in the 2024 campaign.

Read more: The $7,500 federal EV tax credit is on the ballot in November

Child tax credit

Harris last week proposed expanding the child tax credit to $3,600 per child from $2,000, as MarketWatch has reported. She also wants to ramp up the credit to $6,000 for families with children under the age of 1.Trump's running mate, GOP Sen. J.D. Vance of Ohio, has floated expanding the credit to $5,000 per child per family. His suggestion came days before Harris's proposal, during an interview with CBS.

From the MarketWatch archives (April 15): Bipartisan bill to boost child tax credit and corporate breaks looks almost dead on Tax Day

No taxes on tips - or Social Security?

Harris this month called for eliminating taxes on tipped income, with her move coming two months after Trump proposed no taxes on tips. The Harris campaign has offered some details to distinguish her proposal, emphasizing that it would exist alongside a push to increase the minimum wage. In addition, any change in law for such an exemption would apply to income taxes, but payroll taxes would still be assessed, according to a MarketWatch report.Trump proposed not collecting taxes on tips during a June rally in Nevada, a swing state with a large number of voters who are tipped workers. Before Harris announced her support for that change, one prominent Trump ally, GOP Sen. Ted Cruz of Texas, said he thought Trump would win Nevada "on that one issue alone." The former president has offered another proposal in the same vein, saying three weeks ago that seniors shouldn't pay taxes on Social Security benefits.

Drug costs and medical debt

Harris has stressed that the Inflation Reduction Act featured provisions that capped out-of-pocket costs for insulin at $35 a month seniors and out-of-pocket drug PJP costs at $2,000 a year for seniors. She has proposed the same caps for everyone, not just seniors - and has promised to work on canceling medical debt.Trump deserves some credit for $35 insulin, but he has claimed it's all because of him. In fact, experts have said his administration's program offering $35 insulin applied to around 800,000 Medicare beneficiaries, while the Inflation Reduction Act's provisions apply to more than 3 million.

Now read: Why the U.S. dollar's 'weird' August fall could be due to Kamala Harris's rise in the polls

Plus: After Dobbs decision, financial pressures mount for patients and abortion-rights groups

-Victor Reklaitis

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