LARRY KUDLOW: Vice President Kamala Harris is running scared
Why choose the imitation when you can vote for the real thing? That's the subject of the riff. There she goes again, again. Ms. Chameleon Kamala Harris has thrown two new flip-flops at us in just the last 24 hours. Here's a hunch: bad polls are causing flip-flop panic among Team Kamala.
I'm going to speculate that the source of these new flip-flops are a bunch of polls that show she got no bounce from the DNC, and in fact is losing ground to Mr. Trump all over the place. With absolutely no convention bounce, even where national polls show them even or maybe her up a point, she should be up four or five points because Mr. Trump always under-polls.
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In fact, the former president has the best national and swing state polls he's ever had. At this stage of the game, he's beating his past performances from 2016 and 2020. More on this in a moment. As far as the flip-flops, one of them is her newfound support for a small business tax break that House Republicans passed, and then President Trump supported six years ago in 2018.
Back then, it was a $20,000 deduction for new startup business expenses and Democrats were always opposed to it. Democrats have always attacked these kinds of tax breaks for small businesses, but now Kamala has decided to adopt the Trump Republican proposal – and even raise the deduction to $50,000.
Kind of like tax-free tips, isn't it? Then a Wall Street Journal news story said Ms. Harris is planning to propose a less drastic increase in the top capital gains tax rate.
Her capital gains tax would be 33.5% – compared to the current rate of 23.8%. That would still be the highest cap gains rate in over forty years. Instead of keeping 76.2 cents on the extra dollar earned, you'd only be keeping 66.5 cents. So, that would still be a 13% hike in the capital gains tax. You know, if you actually cut the capital gains tax, or at least index it for inflation, you would boost investment and revenues would shoot up.
Incidentally, study after study shows that anytime you raise the capital gains tax, revenues actually fall. When Bill Clinton slashed the capital gains tax rate, revenues soared – on the way to a balanced budget. Speaking of the added tax burden, Ms. Harris may be in favor of a one-time deduction for startups, but she favors an increase in the top tax rate of 39.6% – which is what most owners of small companies will pay.
Any tax hike on capital gains is a huge penalty to owners of successful startups. Remember, her plan would significantly raise estate taxes that are so important to entrepreneurs and their heirs.
Let's not forget, her proposal for a higher corporate tax rate would make America less competitive globally. Indeed, China would have a lower corporate tax and capital gains tax than the U.S. under Kamala’s policies, and she still favors the confiscatory wealth tax on unrealized capital gains.
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Now she's sprinting toward the center, because internally her people have to be worried about her lousy polls. Nate Silver's probability model now has Trump as a 58% favorite. The pay-to-play betting Polymarket has Trump also up, 52% to 47%.
Again, even if you just say the whole race is a toss-up nationwide and among swing states, that means Mr. Trump is really doing much better, because his folks don't like to answer nosy phone calls, tend to be low propensity voters, and most polls underestimate Republican voter samples – and especially Trump voter samples.
So, I'm going to bet Ms. Harris is running scared. Now, you might say imitation is the sincerest form of flattery, but instead, I'm thinking: Why choose the imitation when you can vote for the original, authentic, real thing?
This article is adapted from Larry Kudlow’s opening commentary on the Sept. 4, 2024, edition of "Kudlow."