Chrysostomos Tsoufis

There is no poll in which Americans do not single out the economy as the most important factor on which they will base their vote in the November election.

Looking at the economic agendas of Trump and Harris, one would say that the two contenders envision two different worlds.

And the measures they propose will have, according to all analyses, significant effects on the strongest economy on the planet.

TAXES – EXPENSES

Income tax

Donald Trump: Keeping rates low for households and further reducing the rate for businesses to 15% from 21%
Trump says he will cut spending across the board and significantly increase oil drilling permits to fund what he promises
Kamala Harris: Increase in corporate tax to 28%
Tax hike on millionaires and minimum tax on billionaires to finance the tax cuts he promises

Tax exemptions

Donald Trump: Exemption of tips from taxation
No cap on the state and local tax exemption
Kamala Harris: increase in tax exemption for start-up businesses, increase in tax-free allowance for families with children and birth allowance

EFFECTS

According to the analysis of Bloomberg economists, the Public Debt from 99% of GDP jumps to 116% with the Trump measures, it increases to 109% with the Harris measures.

GDP boosted by 0.3% with Trump measures through 2028. No significant change from Harris interventions.

Inflation rises 0.4% on Trump measures. Harris’s approach has little impact.

INFLATION – MARKET FUNCTION

Donald Trump: With oil drilling permits, he estimates that energy prices will drop

Kamala Harris: He’s even proposing a federal ban on food markups. Cap on private participation in prescription drugs

EFFECTS

Trump’s measures: Doubtful if they can be implemented as the US is already “piercing” more than any other country in the world. They would only pass with a Republican triumph

Harris measures: Analyzes do not show that grocers and supermarkets have increased their profit margins, and there is skepticism among economists that her proposals will harm the functioning of the market.

HOUSING

Donald Trump: Using public land for housing. He promises to lower building costs by cutting red tape while cynically admitting that deporting thousands of immigrants will increase available homes

Kamala Harris: $25,000 grant for first home buyers. €40 billion subsidy fund for renovations and rent control measures.

EFFECTS

Harris measures: Risk of property prices rising as buyer subsidy boosts demand

TRADE

Donald Trump: Tariffs of 20% on all imports and 60% on imports from China

Additional tariffs await those countries that abandon the dollar
Kamala Harris: Maintaining the existing policy with the lowest tariffs
Business tax breaks to compete with the Chinese

EFFECTS

Trump’s measures: Could lead to a 0.8% drop in GDP and a 4.3% increase in inflation!! If, apart from China, other countries also react, the reduction of RES may reach 1.3%.

According to Golman Sachs, for each unit of tariffs, structural inflation (excluding food and energy) increases by 0.1%

MIGRATION

Donald Trump: He has promised to deport millions

Kamala Harris: General reports on legislation that would limit border entries

EFFECTS

Trump measures: In the scenario of deporting immigrants who came after 2020, the drop in GDP is estimated at 3% by 2028 and the decrease in prices at 0.75%
If all illegal immigrants are deported the reduction in GDP exceeds 8% and the reduction in prices 1.5%

According to the Peterson Institute, the deportation of 1.3 million immigrants increases inflation by 1.3% after 3 years. Deporting 7.5 million immigrants means +7.4% in inflation. Donald Trump at his most “arrogant” has talked about deporting 20 million people!!

The conclusion is that in an economy with increased prices 20% in relation to the pandemic, unemployment at a three-year high and a swelling public debt neither of the 2 proposals is a solution to the fiscal and not only chaos.

Just Kamala Harris would do less damage.