Kamala Harris Wants To Repeal Trump Tax Cuts For EVERYONE. Her Replacement Plan Would Likely Hurt Middle Class, Economy. | The Daily Wire
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Kamala Harris Wants To Repeal Trump Tax Cuts For EVERYONE. Her Replacement Plan Would Likely Hurt Middle Class, Economy.

By  Ashe Schow
DailyWire.com

It’s not at all surprising that a Democrat would call for higher taxes and spending while campaigning.

Sen. Kamala Harris (D-CA), who is running for president, said recently she wants to repeal the entire 2017 tax law that cut taxes for the majority of Americans and replace it with a tax cut that doesn’t look like it will help many people. Also, she uses some fuzzy math to explain how repealing the Trump Tax Cuts and Jobs Act (TCJA) will pay for her education plan even though she has her own tax plan that would replace them.

While campaigning in Detroit, Michigan, Harris said she’d “get rid of the whole thing,” referring to Trump’s tax cuts, which gave most Americans a bigger paycheck after they went into effect. Harris’ campaign spokesman, Ian Sams, told Bloomberg that Harris would replace Trump’s tax cuts with her own plan, which would help fewer people. Harris’ plan, called the Livable Incomes For Families Today (LIFT) Act, would ostensibly help low income and middle-class earners by providing them tax credits of up to $6,000 a year. From Bloomberg:

The credit would apply to households earning less than $100,000 annually. Single filers earning under $50,000 a year would get $3,000. The credit could be accessed monthly or in one lump sum at the end of the year. It would begin to phase out for single taxpayers without children earning at least $30,000, single taxpayers with children earning at least $80,000, and married taxpayers earning at least $60,000.

Perhaps this sounds good to people who don’t live in large cities, but as someone who built their career in the Washington, D.C. metropolitan area I struggle to see how this would have helped me.

Ryan Ellis, an expert in tax policy who worked for Grover Norquist for a decade, told me that Harris’ plan, combined with the tax hikes that would hit middle- and lower-income Americans from repealing the Trump tax cuts, would end up raising taxes on net for many families.

“For example, a family of four with two small kids making $90,000 per year would see a TCJA tax increase of $2600,” Ellis said. “But they would only get an offsetting LIFT credit of $1500. Interact the two, and it’s a tax hike of $1100 on this four-figure family.”

Kyle Pomerleau, chief economist and vice president of economic analysis at the Tax Foundation, differed in his assessment of whether individual families would see a tax hike, but said Harris’ plan would end up hurting the economy by discouraging labor force participation.

“The TCJA did reduce taxes for the middle class. We estimated that the law boosted after-tax income by about 1.6 percent for middle-income taxpayers,” Pomerleau told The Daily Wire in an email. “In contrast, we estimate that LIFT would boost this same groups after-tax income by 5.6 percent. Thus the swap would mean the middle class would be a net beneficiary.”

Pomerleau warned, however, that the tax hikes from repealing the TCJA would result in problems for the economy.

“We estimated that the TCJA would boost economic output, wages, and jobs. For example, we think GDP would be about 1.7 percent larger in the long-run due to the TCJA,” Pomerleau wrote. “In contrast, the LIFT credit, due to discouraging labor force participation, would reduce output by about 0.8 percent. Overall, the swap would mean lower economic output.”

Harris has another problem with the plan she discussed before the American Federation of Teachers: Math. Harris told the teachers she had a $315 billion plan that would raise the wages of public school teachers.

Sahil Kapur, one of the authors of the Bloomberg article mentioned above, said on Twitter there was a “math imbalance in Harri’s trio of proposals.”

“She says she’ll repeal the GOP tax law (+$1.9T) and enact the LIFT Act (-$2.8T) plus her teacher pay plan (-$315B),” he tweeted. “That’s still $1.2 trillion in the red.”

He followed up that tweet with information from Harris’ blueprint for her education plan, which said it would strengthen “the estate tax” and crack “down on loopholes that let the very wealthiest, with estates worth multiple millions or billions of dollars, avoid paying their fair share.”

A quick reminder of what the estate tax is: Someone with an estate, who has paid their taxes, dies. In order to collect their inheritance, an heir must pay additional taxes on what is left to them. It’s essentially a double tax scheme.

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