President Joe Biden ended his presidential campaign on Sunday. His departure was probably prompted by concerns from party officials about his ability to serve a second term at the age of 81. However, he plans to complete the remaining three months of his term.
Biden also announced his endorsement of Vice President Kamala Harris as the Democratic nominee for president. Although it doesn’t ensure that she will automatically get the nomination, many investors may want to know the economic changes that Harris might suggest if she runs the presidential race.
Some analysts believe that a Harris ruling may prove more progressive than “Bidenomics.” As a presidential candidate in the past, the former California senator pitched for higher taxes and bigger housing investments, as quoted on New York Times. Let’s delve a little deeper.
Tax Policy
During her candidacy, Kamala Harris proposed replacing Trump's tax cuts with a monthly refundable tax credit called the LIFT the Middle-Class Act, benefiting those earning less than $100,000 annually. Additionally, Harris proposed raising estate taxes to fund a $300 billion plan to increase teacher salaries, unlike Biden’s plan to raise the corporate tax rate.
She criticized Trump’s tax cuts as benefiting the wealthy and claimed that the booming stock market was not helping the middle class. If the middle class gets better off, ETFs like Invesco S&P SmallCap Consumer Discretionary ETF PSCD should benefit.
Trade
Criticizing Trump's trade policies, Harris emphasized enhancing American exports and addressing Chinese intellectual property theft and subsidized exports. She opposed Trump's tariff plans, citing that they would increase consumer expenses like gas and groceries, impacting middle-class families.
During a Democratic primary debate in late 2019, Harris said she would favor bolstering American exports and declared, “I am not a protectionist Democrat.” Large-cap ETFs like Schwab U.S. Large-Cap Growth ETF SCHG should benefit as large-cap stocks have wider global coverage and are more export-centric.
Regarding China, Harris indicated that Beijing should be held accountable for intellectual property theft and flooding foreign markets with heavily subsidized exports. So, be it Trump or Harris, China is unlikely to see any respite. ETFs like iShares MSCI China ETF MCHI and KraneShares CSI China Internet ETF KWEB should not get a big relief.
Marijuana
Vice President Kamala Harris urged the DEA in March this year to expedite the rescheduling of marijuana, criticizing its current Schedule 1 classification as "absurd" and "patently unfair." She put stress on the need for swift action and highlighted ongoing efforts toward rescheduling. As a result, marijuana ETFs like Roundhill Cannabis ETF WEED and AdvisorShares Pure US Cannabis ETF MSOS should gain if Harris emerges as a presidential candidate (read: Is Rescheduling a Certainty for Cannabis? ETFs That Surge).
Climate
One of the key achievements of the Biden presidency was signing the Inflation Reduction Act, or IRA — the biggest climate spending law in U.S. history, with the potential to help reduce greenhouse gas emissions up to 42% below 2005 levels by 2030.
As vice president, Harris argued for the allocation of $20 billion for the Environmental Protection Agency’s (EPA) Greenhouse Gas Reduction Fund. In short, she is in favor of promoting clean energy, including the installation of energy-efficient lighting, and replacing gas furnaces with electric heat pumps. So, be it Biden or Harris, clean energy ETFs like iShares Global Clean Energy ETF ICLN.
Housing
Harris prioritized affordable housing, advocating for the Rent Relief Act, offering tax credits to renters earning under $100,000, aiming to ease housing cost burdens. Real estate ETFs like iShares U.S. Real Estate ETF IYR could be beneficial.
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Get it free >>iShares MSCI China ETF (MCHI): ETF Research Reports
iShares Global Clean Energy ETF (ICLN): ETF Research Reports
KraneShares CSI China Internet ETF (KWEB): ETF Research Reports
Invesco S&P SmallCap Consumer Discretionary ETF (PSCD): ETF Research Reports
iShares U.S. Real Estate ETF (IYR): ETF Research Reports
Schwab U.S. Large-Cap Growth ETF (SCHG): ETF Research Reports
AdvisorShares Pure US Cannabis ETF (MSOS): ETF Research Reports
Roundhill Cannabis ETF (WEED): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
