Kamala Harris’ Impact on Retirement Savers: What You Need to Know?

The following economic policies could be implemented by Kamala Harris as she comes out as a presumed candidate for president: Obviously, economists are trying to figure out what her presidency might imply for the economy, or more specifically for retirement savings. Concoquely, Harris portraying herself as ‘messiah’ for working families, ‘popul’, sympathetic/ and ‘pen’ has been deemed a populist gimmick by The Washington Post Editorial Board. Given that Harris’s agenda entails taxes and regulation, a Harris White House could be problematic for retirement savers.

Increased Regulations & Taxes

Analysts believe that the approach of Harris’s administration will lead to the growth of regulatory measures or affect many firms’ costs. It is alleged, and caution has been sounded by Sidney Curry, a certified financial instructor and president of BCH Holdings. He said, “The Harris administration would continue to focus on regulation, which will cost a lot of money to many businesses. This will lead to an increase in the prices of consumer goods, therefore decreasing the effective purchasing power in the present, not to mention that during your retirement you will spend more money on goods and services such as gas, oil and energy. ”

Another possible risk factor for real estate investments is laws regulating tenancy, such as rent stabilization, of which Harris is supportive. And perhaps the increased taxes for companies and the wealthy, in order to finance it, will reduce the addition to 401(k) accounts. The Biden-Harris White House has put forward a suggestion of increasing the corporate tax rate from 21% to 28%. An action that may provoke the fluctuation of shares and therefore cut down on the yields of the investment made before retirement. In this case, high-earners are likely to end up with a reduction in their 401(k) contributions due to the increased income taxes. Rising capital gains taxes could also take a bigger bite from distributions from a 401(k) in retirement.

Also Read: IRS Makes A big Announcement: $200 And $1,400 Payments Confirmed In August!

Social Security and Medicare

The majority of Americans are worried about the sustainability of Social Security. According to the estimates, the reserve will be exhausted in the future and by the middle of 2035, at the latest. Harris has made her commitment to keep and even grow the program on record. Harris has also expressed support for increasing Medicare and what she referred to as the vision of no more private insurers, essentially. To bring about these goals would call for steep new taxes on higher-income people, which in turn would put pressure on retirement savings.

Tax Policy and Wealth Management

Liberals warned that rich, retiring people should be ready to lose some of the tax preferences developed under the Trump administration, which will be broken under the Harris administration. Many of the measures introduced in Trump’s 2017 tax reform are to expire in 2025. These reforms are expected to be given the green light to stand still and be allowed by Harris to expire. The rate of personal income tax would be raised to 39.6% for income above $400,000. Of course, Harris has stated her general desire not to increase taxes on households that make less than $400,000 a year, but the death of these breaks might greatly affect wealthier retirees.

Furthermore, Harris might serve Biden’s ambition to enhance taxes on capital gains and dividends. They’d impose this increase as ordinary income for the wealthy earners in society. As most retirees rely on capital gains for most of their income, this means that they will be required to pay more taxes. Also, Harris has advocated for an increase in estate taxes for the affluent to fund her preferred initiatives.

Price Controls and Regulation

The candidate for the post of head of state, Harris, has declared her readiness to fight inflation. She attributes it to corporate greed and rampant market power, not the trillions of dollars the Biden administration has spent. She calls for a federal law against exorbitant charges for requirements such as food and groceries. However, the critics are threatening that such measures could provoke shortages. Such policies may deter the supply of goods and firms may opt not to release their products if prices are regulated. Ever given a shot at these solutions, Kevin O’Leary from Shark Tank condemned the idiotic notions by saying, “First, they tried that in Venezuela, Cuba, North Korea, and the USSR, it will not work.”

In addition to price controls, Harris aims to address shortages in the housing market. She wants to encourage the construction of starter homes and affordable rental units through tax incentives. However, some economists warn that her proposed $25,000 first-time homebuyer subsidy could inadvertently drive up home prices, negating the benefits of increased supply.

Middle-Class Tax Relief

Harris is trying to garner middle-class support with promises of lowering their tax burden. She supports restoring the expanded child tax credit of $3,600 per child, which expired in 2022. Harris proposed a new $6,000 child tax credit for families with a newborn. Experts caution that they must be carefully funded to avoid adding to the national debt and risking further inflation. As Mark Zandi of Moody’s Analytics emphasizes, “I don’t think you can do anything without it being paid for. That would be counterproductive.” 

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