The upcoming U.S. presidential election presents a sharp contrast between the economic policies of Donald Trump and Kamala Harris, with significant implications for taxes, housing, inflation, manufacturing, and the U.S. dollar. Below is a comprehensive analysis of each candidate’s proposals, clearly outlining their distinct approaches.
Taxation: Sharp Differences with Far-Reaching Market Consequences
Tax policy is a major area where Trump and Harris differ significantly, particularly concerning corporate and individual taxes, which are crucial for market performance.
Donald Trump aims to extend and deepen the tax cuts he implemented in 2017. The corporate tax rate, which currently stands at 21%, would be further reduced to 20% or even 15% under Trump’s plan. Trump believes that lower corporate taxes will stimulate economic growth by boosting corporate profitability. Additionally, Trump seeks to make the 2017 individual tax cuts permanent, as these are set to expire in 2025. His overall tax strategy is rooted in the idea that reducing taxes will encourage investment, drive economic expansion, and ultimately benefit the stock market by increasing corporate earnings.
Kamala Harris, in contrast, proposes to increase the corporate tax rate to 28%. Harris’s approach is based on the belief that raising taxes on corporations is necessary to generate government revenue for social programs and infrastructure projects. On individual taxes, Harris intends to increase taxes on those earning more than $400,000 annually, including raising capital gains taxes and introducing taxes on unrealized gains for the wealthy. Her tax policy reflects a focus on addressing income inequality and ensuring that the wealthiest Americans contribute more to public resources.
The implications of these tax policies are substantial. Trump’s proposed tax cuts are likely to be positive for the stock market by enhancing corporate earnings, but they could also contribute to widening fiscal deficits. In contrast, Harris’s proposed tax increases may dampen market enthusiasm, particularly among high-income individuals and corporations, potentially leading to a more restrained economic environment.
Housing: Comprehensive Support with Diverging Approaches
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