Economist and TrendMacro Chief Investment Officer Don Luskin warned Tuesday on Fox Business’ “The Evening Edit” that Vice President Kamala Harris’ proposal to increase corporate taxes could potentially cut 13% from Americans’ 401(k)s.
On Monday, Harris’ campaign confirmed her proposal to raise corporate taxes by 7%, pledging to increase them from 21% to 28% if she were to get elected this November. Luskin ripped Harris’ potential plan, stating that not only would it drive up expenses by 33%, but would hit Americans’ 401(k)s in the process. (RELATED: Corporate America Considers Throwing Support Behind Harris Despite Targeting Their Profits: REPORT)
“Let’s talk about that 28% corporate tax rate, alright? That’s the big one. First, the Treasury is making more on the corporate tax rate now at today’s 21% rate than it expected to do at the higher pre-Trump tax rate. So you want to cut the deficit? Do not raise corporate taxes,” Luskin said.
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“Number two, corporate taxes are just an expense for companies, they’re a huge expense. Raising the corporate tax from 21% where it is today to 28%, where Kamala Harris wants to put it, is a 33% expense increase,” Luskin continued. “Expenses will go up 33%. That will take 13% off of S&P 500 earnings, that will take 13% off the S&P 500, that will take 13% off your 401(k). Any further questions? Didn’t think so.”
The push to increase taxes on corporations follows Harris’ North Carolina speech where she unveiled her economic plan on housing, tax credits and lowering grocery prices, which has faced major pushback over its proposed federal ban on “corporate price gouging.”
Despite her plans to increase taxes and regulations, many business leaders are reportedly considering supporting Harris, according to the Financial Times. Although business leaders have traditionally backed Republicans, many are allegedly hoping Harris will reconsider Biden’s firm positions on competition, labor and financial service policies.
“In a matter of weeks, the business community has gone from readying itself for a Republican-run Washington to scenario planning for a wide range of outcomes,” Republican consultant Ken Spain told the Financial Times. “Many are hedging their bets given the volatility of the political environment.”
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