Presidential Candidates' Economic Plans, From Perspective Of Financial Services Industry

Two weeks out from Election Day former President Donald Trump and Vice President Kamala Harris continue to plead their cases to the American people. That includes trying to convince voters their respective economic plans are best for the nation's economy.

Polls show that not only is the economy still one of the top issues for voters, but also that a majority of Americans -- 62 percent, according to a recent Associated Press-NORC Center for Public Affairs Research poll -- feel the economy is in bad shape right now. The same poll and others, likewise, show that the advantage Trump had over Harris, in terms of who voters trust to improve the economy, has evaporated.

"Starting in January," Trump said at a recent rally, "we will give our companies the lowest taxes."

Lowering taxes for businesses is central to the Trump economic plan.

In short, Trump wants to extend the tax cuts Congress approved in his 2017 Tax Cuts and Jobs Act (TCJA), lower the corporate tax rate from 21 to 15 percent, and exempt tip and overtime income from federal income taxes. He would offset the cost of these tax breaks, largely through the imposition of tariffs: a 10-20 percent universal tariff on all imported goods, and at least 60 percent on all goods from China. 

Over ten years, the Center for a Responsible Federal Budget estimates Trump's plan would increase the national debt $7.5 trillion. 

Vice President Harris's economic plan is aimed at traditional Democratic voters. 

"And I will always -- it is my pledge to you," Harris said at a rally last week, "put the middle class and working people first." 

Highlights of the Harris economic plan include extending the TCJA tax scheme for families earning less than $400,000, expanding the Child Tax Credit, exempting tips from federal income tax, and raising the minimum wage. She'd balance those expenses by raising the corporate tax rate to 28 percent and the top individual rate from 37 percent to 39.6 percent.

The Harris plan, according to CRFB, would increase the national debt $3.5 trillion over the next decade.

"[The plans] follow along traditional party lines," said lobbyist Scott Talbott, "where we see Republicans favoring more business cuts and Democrats favoring more individual cuts."

Talbott is Executive Vice President for the Electronic Transactions Association (ETA), the global trade association of the payments technology industry. On behalf of ETA's 500 member companies, Talbott follows the candidates' economic proposals closely, especially when they could impact business.

"Lowering the corporate rate," Talbott said in an interview last week, "helps corporations have more money in their pocket, which allows them to do more for their customers -- innovation, R&D. 

With regard to tariffs, Talbott says, many people seem to miss that they're not paid by the company sending the product to the United States, but by the company or person buying it.

"So, in many instances, some people call tariffs 'taxes' because they have to be paid -- they raise the price of those goods," Talbott explained. "Now, the tariff is collected by the U.S., so there's a revenue impact there. But at the same time, the price of the good you're bringing in is increased."

Talbott says, at the end of the day, his industry doesn't endorse one plan -- or candidate -- over the other.

"Financial services are bipartisan," he stated. "We work with both parties and, we're looking to see what does happen.