Posted September 20, 2024
By Matt Insley
Unpacking Harris’ “Opportunity Economy”
As we forecasted Wednesday morning, the Federal Reserve cut rates by 50 bps.
And the stock market (which we also forecasted) has been high on the news since.
Will the market sustain its “hopium” high? Did the Fed cut rates out of confidence or consternation?
Those are questions we can’t flesh out today, but what follows is a question we’ll do our best to answer…
During the recent presidential debate, Harris trotted out her latest buzzword: the “Opportunity Economy.”
Sounds nice… But what does it even mean?
(Would you be surprised to learn there’s blessedly little to research?)
Harris claims she wants to build up the middle class and create opportunities for all Americans.
To that end, Harris is offering a grab bag of handouts — mainly in the form of tax credits.
First, extending a $6,000 child tax credit for qualified families with a newborn… which would taper to $3,600 for a child two–six-years-old… settling at $3,000 for a child age seven–17.
Harris claims the child tax credit lifts children out of poverty. And you might assume the credits offer substantial help for struggling families.
Think again.
The reality: Households raking in over $100,000 a year — well above the average, I’ll add — snagged a whopping 44% of the benefits, according to 2019 data from the Census Bureau.
Meanwhile, families scraping by on less than $40,000 annually were left with a pitiful 11% of the pie…
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Your Rundown for Friday, September 20, 2024...
It’s a Catchy Slogan, But…
Another tax credit aimed at creating the “Opportunity Economy”...
Harris wants to give a $50,000 tax deduction to business startups.
We’re pro-American business, but two other Harris’ tax proposals seem to be completely at odds with that objective:
- She proposes to increase the corporate income tax rate from 21% to 28%.
- At the same time, Harris aims to increase the controversial corporate alternative minimum tax from 15% to 21%.
Make it make sense!
Then there’s housing. Harris promises to build 3 million new housing units. (Because when has government-sponsored housing ever run amuck?)
And she wants to offer a $25,000 tax credit for first-time homebuyers, spread out over four years.
According to the Tax Foundation: “We estimate the proposed tax changes would reduce long-run GDP by 2.0%, [wages] by 1.2%, and employment by about 786,000 full-time equivalent jobs.
“We find the tax policies would raise top tax rates on corporate and individual income to among the highest in the developed world, slowing economic growth and reducing competitiveness.” [Emphasis ours]
But Harris frames the “Opportunity Economy” as a way to create economic security, with a particular focus on middle class American families and businesses.
Meanwhile, Trump's policies during his term as President actually delivered record-low unemployment, rising wages, economic growth and a robust stock market.
But who needs results when you've got a catchy slogan, right?
Given Trump's track record, reader, would you say you were better or worse off during the years of Trump’s presidency or Biden’s? Cite specifics, and we’ll publish your feedback on Monday.
Market Rundown for Friday, Sept. 20, 2024
S&P 500 futures are up 1.70% to 5,710.
Oil is down 0.40% to $71.65 for a barrel of WTI.
Gold is up 1% to $2,643 per ounce.
Bitcoin? Up over $63,000 this morning.
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