Would Trump or Harris help Philadelphia’s economy more?

Vice President Kamala Harris and former President Donald Trump focus on the most critical issue for Pennsylvania voters: the economy.

Harris has made a series of economic promises this month. She said she would ban grocery price gouging, provide a grant for first-time homebuyers, invest $40 billion in affordable housing and expand the child tax credit.

Trump has also focused on the economy, but he offers different solutions. Trump has promised to sign an executive order to lower inflation, and in a campaign speech he announced plans to enhance U.S. oil drilling and cut energy prices in half over 18 months.

He is also expected to extend tax cuts from 2017 and has promised tariffs of at least 10% on imported goods.

“Ultimately, the differences in policy views between the candidates are really quite drastic,” said Stephen Herzenberg, an economist who runs the left-leaning Keystone Research Center.

But what could all this mean for Philadelphians? Quite a lot, it turns out. Here’s what you need to know.

How would Trump and Harris approach the cost of goods?

People care about how much everything costs. Both candidates have addressed that issue with proposals to cut personal spending and enhance cash in hand, but voters trust Trump more on the economy than Harris, according to an August poll New York Times/Siena College Poll of Pennsylvania Voters.

“If I’m a strategist in either party, I tell you to talk about the economy in simple terms,” said Frank Robinson, a former executive at Econsult Solutions, a Philadelphia consulting firm. “That’s how you get votes.”

Harris has promised to ban price gouging on food and groceries, an idea that Sen. Bob Casey has made a hallmark of his Senate campaign. Casey promoted the proposal at last week’s Democratic National Convention.

Harris also said he would pursue mergers and acquisitions that would consolidate too much power and too few grocery corporations.

Economist Joshua Mask, an assistant professor at Temple University, said that approach could actually lead to higher prices. Mask estimates that Harris’ approach would reduce supply, which could enhance hoarding, drive up grocery prices and enhance inflation.

“If you blame inflation on corporate profit margins, that’s not the culprit,” Mask said.

Trump wants to eliminate taxes on Social Security income, a move reported by the nonpartisan Commission for a Responsible Federal Budget could enhance the budget deficit by $1.8 trillion over 10 years.

Trump also wants to reinstate high tariffs on foreign imports that he believes will protect American manufacturing. Economists including Mask have said the tariffs would cause inflation and essentially be a tax on American consumers.

How do Harris and Trump differ on tax policy?

Another Harris proposal that could mean a lot to Philadelphia families is Reinstating the expanded child tax credit enacted by the Biden-Harris administration, with an additional $2,400 for families with children under age 1. In Philadelphia, the nation’s poorest large city, those extra dollars have helped families a lot during the pandemic.

The expanded tax credit was in effect for the 2021 tax year as part of President Joe Biden’s American Rescue Plan. He wanted to make it lasting but it was blocked in the Senate. Harris’ plan would revive and expand it.

After the Biden-Harris package was implemented, the child poverty rate dropped from 9.7% to 5.2%.

One of Trump’s biggest victories as president was the tax cuts he signed into law in 2017. If he returns to the White House, Trump wants to further lower the corporate tax rate from 21% to 15%, which he says will spur investment and create more jobs. Harris wants to raise taxes on gigantic businesses. Her campaign has pledged to enhance the rate to 28%. Before Trump’s cuts, the tax rate was 35%.

Harris also proposed tax cuts for the middle class.

The Committee for a Responsible Federal Budget said Harris’ corporate tax enhance could reduce US deficit rises by $1 trillion over 10 years. Trump’s cuts on the other hand may enhance the deficit by almost $5 trillion in accordance with the opinion of the Senate Budget Committee.

The two campaigns contrasted sharply in their responses to The Inquirer. Harris’ campaign said Trump and his vice presidential candidate, Senator J.D. Vance of Ohio, want “taxes for their billionaire friends.”

Kush Desai, a spokesman for the Trump campaign in Pennsylvania, argued that the former president had proposed a better economic program for the state.

“Pennsylvanians remember the low inflation, hot job market, and rising wages they experienced under Trump, and no amount of gerrymandering will change that reality,” Desai said.

Harris’ Public Housing Agenda Could Be a ‘Boon’ for Philadelphia

The lack of details from both Harris and Trump makes it challenging to predict exactly what will happen in Philadelphia if either wins the November election, experts say.

Robinson and Mask say Harris’ housing program could have a clear and positive impact on Philadelphia residents if implemented correctly.

Harris’ housing affordability package includes $25,000 in down payment assistance for first-time homebuyers, a package of incentives for developers and a $40 billion fund to encourage local governments to build affordable housing.

“We need housing, we need jobs, we need to continue to grow our businesses,” said Robinson, who left Econsult in August to become director of economic development in Montgomery, Ala. “We need all of these things, and if we do them right, it can be a boon.”

Mask, the Temple University economist, said all of these housing proposals could prove effective.

Trump’s Fossil Fuel Focus Helps Parts of Pennsylvania, But Philadelphia Benefits from Harris’ Clean Energy Agenda

Trump’s pledge to “drill, baby, drill” for fossil fuels may bode better for parts of the state, such as southwestern Pennsylvania, where development is supporting the fracking industry.

The Biden-Harris administration’s investment in pristine energy is helping to create hundreds of jobs in Philadelphia, said Mark Muro, a senior fellow at the Brookings Institution.

The $750 million Mid-Atlantic Hydrogen Hub, which will be built in Philadelphia, Delaware, parts of southern New Jersey and parts of southeastern Pennsylvania, is expected to support a total of 20,000 jobs across the region.

On the other hand, Harris will need to counter the pristine energy backslide in classic fossil fuel jobs, Muro said.

“I have criticized in the past our … neglect of transition costs,” Muro said of the impact of changing from one economic engine to another. In the past, “we haven’t done much to help people who have been hurt or left behind.”

Pennsylvania’s economy does better with Democrats in the White House

The latest study conducted by Keystone Research Center found that the state’s economy performed better under Democratic presidents across four of five economic indicators.

Herzenberg and other researchers have found that unemployment rates are lower, job growth is higher, household incomes rise more evenly and gross domestic product, or GDP, growth is higher when a Democrat is at the helm.

According to Bureau of Labor Statistics data cited by Keystone, Pennsylvania has lost about 140,000 manufacturing jobs since 1949 under Republican presidents, including Trump, while it has gained 60,000 manufacturing jobs under Democratic presidents, including 28,000 jobs under Biden.

Under Republican rule Under Democratic presidents, real median wages are higher, but low-wage workers see greater economic growth.

“We have to choose whether we want to maintain shared prosperity or go back to an economy for the 1%, and that contrast basically describes the partisan divide,” Herzenberg said.