Harris aims for bigger deficits and a weaker economy
The gaggle of Democratic presidential candidates continues to issue position papers, each seemingly more intrusive and expensive than the last. Among the more costly plans floating in the political ether right now: Sen. Kamala Harris' proposed "LIFT the Middle Class Act."
According to a Tax Foundation analysis, it's a recipe for red ink and economic pain. The highlights:
Senator Kamala Harris (D-CA) announced plans to introduce legislation to create a new refundable tax credit that would be available to low- and middle-income taxpayers, called the “LIFT the Middle-Class Act.”
The LIFT credit would reduce federal revenue by $2.7 trillion between 2019 and 2028 on a conventional basis.
LIFT would slightly increase the weighted average marginal tax rate on labor, leading to 825,906 fewer full-time equivalent jobs and a 0.7 percent smaller economy in the long run. Pretax wages would remain unchanged.
The smaller projected economy over the next decade would result in slightly lower revenue collections. As a result, we estimate that this proposal would reduce federal revenue by $2.8 trillion on a dynamic basis.
LIFT would greatly increase the progressivity of the tax code by raising the after-tax incomes of the bottom 20 percent of taxpayers by 20.5 percent. Overall, taxpayer after-tax income would rise by 2.4 percent.
Larger federal deficits, fewer jobs, and a weaker economy. That's quite a recipe...for disaster.