MICHEL MARTIN, HOST:
A common criticism of Vice President Kamala Harris is that she has not been clear about what her policies would be as president, especially on the economy.
A MARTÍNEZ, HOST:
So let's hear about the policies she has proposed so far. Economist Kim Clausing previously served in President Biden's Treasury Department. Today, she's a professor of tax policy at UCLA law school.
MARTIN: When she spoke with our co-host Steve Inskeep, they started by talking about the tariffs former President Donald Trump ushered in as president - tariffs, he says, he would expand in a second term.
KIM CLAUSING: Most economists think that those tariffs raised household costs by several hundred dollars. They accounted for at least a one-time increase in prices. It's not clear that they're responsible for sustained inflation, but those tariffs are a big part of why things are more expensive.
STEVE INSKEEP, HOST:
Former President Trump made an interesting point about tariffs during the debate the other night. In addressing Harris, he said, you're in the White House. You're part of the administration. You could have canceled my tariffs on China at any time, but you left them in place. You must think they're good. Isn't it true that the candidates are essentially on the same page there?
CLAUSING: I mean, I think we should distinguish the Chinese tariffs from Trump's new proposals, which suggest a sort of willy-nilly application of tariffs to each and every one of our trading partners. And those new tariffs that he's suggested really fall on a tax base that's 10 times the size of the first-round tariffs. So we should distinguish strategic, narrow, targeted tariffs from this carte blanche approach.
INSKEEP: In 2017, when Trump was president, he signed a tax cut. It expires next year. The former president has promised to extend that tax cut and even add to it. The vice president has promised to extend most of the tax cuts for people making less than $400,000 a year. People above that would pay some more. How different are they really, though?
CLAUSING: Yeah, I think the tax policy is actually one of the most different areas when you look at these two candidates. The Trump proposals put this big sales tax, or tariff, on the middle class and the poor, and it disproportionately hurts those groups to only partially pay for tax cuts that disproportionately benefit those at the top. And if you look at the extensions of the Trump tax cuts, and you add in his 15% corporate tax rate cut, those are huge benefits to those at the very top of the distribution, but they're paired with a big tax increase for the rest of us. And by my math, the bottom 80% actually lose on net from these proposals.
If you contrast those with what candidate Harris is suggesting, she wants to preserve only those tax cuts that benefit those below 400,000. And that's a less expensive set of tax cuts than the ones that the Republicans want to extend. And if you shave off those at the top - right? - you're doing a less regressive approach. It's still the case that well-off people will benefit more from any extension. But she's also suggested other ways to help those who are struggling.
INSKEEP: I'm glad you mentioned that. Harris, in the debate the other night, mentioned a variety of things that she says would help middle-income people. One of them is an expanded child tax credit. She talked about helping people with down payments on their homes. These all sound good, but do they make economic sense?
CLAUSING: I think they make a lot of economic sense. Let's start with the child tax credit. We saw from the expansions in the early Biden years, where the child tax credit became $3,600 - and she suggested that as well, in addition to this larger one, for the first year of a child's life - we saw that those child tax credit expansions led to a dramatic reduction in child poverty. And those kinds of investments pay dividends down the road as children can lead more productive and healthy lives. So the research suggests that these are some of the best ways we can spend money is investing in children and in the future. So I think that's very solid foundation.
And the housing has two elements. There's both a supply-side focus on building more housing, and that's a really important one because housing prices have been too high for a lot of Americans, but also an emphasis on helping those first-time, first-generation homebuyers afford a down payment. So it's a pretty balanced approach to addressing a lot of areas where Americans feel the costs have been too high.
INSKEEP: Kim Clausing is a professor of tax law and policy at UCLA. Thanks so much.
CLAUSING: Thank you for having me. Transcript provided by NPR, Copyright NPR.
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