As the 2024 election season ramps up, Vice President Kamala Harris is making waves with her economic proposals. Recently, Harris confirmed her plan to increase corporate taxes, a move that has sparked widespread debate and concern.

While the headlines have focused on her pledge to raise taxes on big businesses, the broader implications of this decision could hit closer to home than many Americans realize. But before we dive into the potential fallout, let’s take a step back and look at the broader economic picture.

Her proposal to impose a federal ban on “corporate price gouging” has already faced significant pushback from various quarters. While her supporters argue that these measures are necessary to curb corporate greed and protect consumers, critics warn that the real cost of these policies could be far more than just a few extra cents at the checkout line.

From Daily Caller:
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…

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…

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.”

A Risky Bet on Corporate Taxes

Enter Don Luskin, Chief Investment Officer at TrendMacro, who isn’t buying what Harris is selling. Speaking on Fox Business’ “The Evening Edit,” Luskin didn’t mince words when it came to the potential impact of Harris’ tax plan. He warned that raising the corporate tax rate from 21% to 28% could have dire consequences for everyday Americans, particularly those with retirement savings tied up in 401(k)s.

“Let’s talk about that 28% corporate tax rate, alright? That’s the big one,” Luskin began, pointing out that the Treasury is already making more on the current 21% rate than it did before the Trump-era tax cuts. According to Luskin, the logic behind raising corporate taxes to reduce the deficit simply doesn’t hold up. In fact, he argues, it could have the opposite effect by stifling economic growth and hurting businesses.

But it’s not just about the numbers on paper. Luskin highlighted a more immediate concern for millions of Americans: their retirement savings. “Corporate taxes are just an expense for companies, they’re a huge expense,” he explained. Raising the corporate tax rate to 28% would result in a 33% increase in expenses for businesses. This, in turn, could slash 13% off S&P 500 earnings, directly impacting the value of 401(k) accounts tied to those stocks. For anyone with a retirement plan, that’s a hit they can’t afford to take.

The Business Community’s Dilemma

Despite the looming threat of higher taxes and increased regulations, some business leaders are reportedly considering backing Harris. According to the Financial Times, the volatility of the political environment has left many in corporate America hedging their bets. Traditionally, big businesses have leaned Republican, but with the current landscape, some are hoping that Harris might reconsider the more stringent policies she’s proposed.

“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,” said Republican consultant Ken Spain. This uncertainty underscores the challenges Harris faces as she tries to balance her party’s push for economic reform with the realities of governing in a deeply divided nation.