Three tax credits proposed by Kamala Harris, aimed at low- and middle-income households, are projected to reduce federal tax revenues by $2 trillion over the next decade, according to a new analysis from the Tax Policy Center (TPC). These proposals include an expanded Child Tax Credit, an enhanced Earned Income Tax Credit, and a refundable tax credit of up to $25,000 for first-time homebuyers. More than 70% of households earning approximately $113,000 or less would benefit from at least one of these initiatives.
Can the candidates’ tax plans support the costs of their proposals? TPC’s Howard Gleckman explores whether the tariffs suggested by Republican presidential candidate Donald Trump can finance his policy promises, while TPC’s Renu Zaretsky analyzes the tax cuts and increases proposed by Democratic candidate Kamala Harris.
Pledges against tax increases pose challenges for achieving policy goals. In 2016, Republican Donald Trump committed to lowering taxes for the middle class, while Democrat Hillary Clinton vowed not to raise taxes on individuals earning under $250,000. In 2020, Joe Biden, then a candidate, promised not to increase taxes on anyone making less than $400,000—a commitment that Harris reaffirmed this summer. TPC’s Adam Looney and Elena Patel demonstrate how these income-specific tax pledges complicate the tax code and hinder reform efforts.
In fiscal context, the Congressional Budget Office reported that federal revenues from October 2023 to September 2024 amounted to $4.9 trillion, with spending reaching $6.8 trillion, resulting in a budget deficit of $1.8 trillion for fiscal year 2024.
Upcoming: “It’s a Man’s World—Revealing and Addressing Gender Bias in Tax Law and Policy,” a two-day symposium hosted by the American Tax Policy Institute on October 17 and 18. The event will feature an academic roundtable on Thursday and a plenary session on Friday. Full program details and pre-registration are available online.
In a related case, a man from Riverside County, California, faces six years in prison for a tax preparation scheme that defrauded the IRS of $28 million over ten years. He was found guilty of preparing false tax returns and advising clients to create fictitious corporations, allowing them to improperly deduct personal expenses—such as mortgage and car payments—as business expenses.