Like the general electorate, Catholic voters say the economy is their primary concern by a wide margin over competing issues like abortion, parental rights, and the war in Ukraine.
Former president Donald Trump and Vice President Kamala Harris, who both hold undergraduate degrees in economics, have responded with two very different plans to strengthen the economy following the malaise of recent years.
Trump is promoting an “America first” economic agenda that includes lower taxes, higher tariffs on foreign goods — particularly from China — and ramped-up domestic oil and gas production to lower energy costs.
Harris, meanwhile, is touting an “opportunity economy,” promising a crackdown on price gouging, expanded government subsidies for first-time homebuyers, and tax credits for small-business entrepreneurs.
Will either approach actually work? Several Catholic economists who spoke with the Register reacted negatively to aspects of both candidates’ plans, both from the point of view of sound economics and the basic principles of Catholic social teaching (CST).
Among them is Hannah Kling, assistant professor of data analytics and economics at Belmont Abbey College.
“As a Catholic economics professor, I’m very frustrated by how many policies on both sides of the aisle violate common sense and Catholic social thought,” she told the Register. “That tariffs and price-gouging laws are extremely popular among the general public while all economists know they only hurt the general public really breaks my heart.”
What Are the Candidates’ Plans?
Despite some indications of economic improvement in recent months — the gross domestic product (GDP) grew at an annual rate of 3% in the second quarter of 2024 and inflation has cooled to 2.5%, down from the peak of 9.1% in 2022, though still above the Federal Reserve’s target rate — the persistent high cost of living, exacerbated by high housing and food costs, has kept voters sour on the state of the economy.
The most recent Gallup poll on voter sentiment toward the economy shows that only 24% of Americans rate the economy as either “good” or “excellent.” And polls throughout the summer have found that voters trust Trump to improve the economy more than Harris, though the gap has been closing in recent weeks.
The centerpiece of Trump’s economic platform is his plan to place a 10% tariff on most imports and 60% or more on Chinese goods. By doing this he aims to increase federal revenues, which would allow the government to reduce income taxes. This, he believes, would ultimately boost the American manufacturing sector by reducing our reliance on foreign goods and restore trade balance with China.
“When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so,” Trump wrote of his tariff plan in a post on X.
Trump also plans to enact sweeping tax cuts by lowering the corporate rate from 21% to 15% for manufacturers that produce goods with American workers and eliminating taxes on workers for overtime pay and tips. He has also vowed to eliminate taxes seniors pay on Social Security benefits.
Harris, on the contrary, has vowed to make the tax system “fairer” by raising the corporate tax rate to 28%, raising taxes on individuals who make more than $400,000 per year, and raising the long-term capital gains tax by 8% on individuals who earn more than $1 million annually.
In addition, Harris has pledged to reduce the cost of living by offering first-time homebuyers up to $25,000 in down-payment assistance and banning “price gouging” practices in the food industry.
“My plan will include new penalties for opportunistic companies that exploit crises and break the rules,” Harris said at a recent campaign stop.
During a recently livestreamed town hall with Oprah Winfrey, Harris touted endorsements for her economic plan from Goldman Sachs and the University of Pennsylvania’s Wharton School of Business.
However, a spokesperson for the Wharton School denied the endorsement in a subsequent statement, saying, “We did not find a positive impact on the economy from her plan in any future year.”
Goldman Sachs also threw cold water on Harris’ endorsement boast. Speaking on CNBC, Goldman CEO David Solomon said that the report Harris cited “came from an independent analysis” and that the report “blew up into something bigger than it was intended to be,” before citing issues with both candidates’ economic policies.
Goldman Sachs analysts have also criticized Trump’s economic plan, saying the GDP would be diminished by increased tariffs and a crackdown on immigration.
The Church’s View on Economics
Assessing how a particular public policy will benefit or harm their own bottom lines isn’t the only factor for Catholics to consider when it comes to evaluating a candidate’s position on issues like the economy.
The Church’s moral theology on justice, peace and human dignity — also known as Catholic social teaching — offers key principles to bear in mind when making prudential judgments about what policies best serve the common good, such as the preference for resolving economic issues at the lowest level capable of addressing them effectively and the imperative to protect and uphold human dignity. The U.S. Conference of Catholic Bishops’ 1996 statement titled “A Catholic Framework for Economic Life,” for example, teaches that “a fundamental moral measure of any economy is how the poor and vulnerable are faring.”
The race between Harris and Trump presents a difficult dilemma for Catholics since both candidates’ economic plans are relatively unorthodox, making it difficult for experts to project outcomes for either.
According to Kling, economic policy that broadly supports freer, more open economies, with lower regulation and less targeted subsidies and tax breaks, is best supported by the available research. For this reason, she believes Trump’s tariff plan, which is an example of “protectionism” because it, in theory, “protects” domestic industries by taxing imports, violates these principles on several fronts.
“Economically, tariffs are a terrible idea,” she told the Register. “They can dramatically increase the costs for all American producers and consumers, while ‘protecting’ very few American jobs. The only ones who benefit from protective tariffs are companies in the protected industry.”
As evidence of her claim, Kling cited the government’s enactment of tariffs on washing machines in 2018 during the first Trump administration. This was ostensibly done to protect domestic washing-machine producer Whirlpool from foreign competition. Due to increased prices, this cost American consumers $1.5 billion per year, while creating only 1,800 jobs at the company; in effect, Americans paid $817,000 per job.
Ruediger Bachmann, professor of economics at the University of Notre Dame and research fellow at the Centre for Economic Policy Research, agrees that tariffs will increase costs.
“It’s inflationary, if anything,” he told the Register. “It will deprive American consumers of cheap, high-quality goods that others can produce better. As a rule, the more tariffs, the more people will have to pay for certain goods, or they won’t get them at all. There’s little economic rationale.”
Richard Coronado, professor emeritus at Benedictine College and member of the American Economics Association, concurs with Kling and Bachmann. He told the Register that if Trump were to follow through on his tariff plan, “the economy is most likely to experience both the start of a recession and higher inflation, due to the significantly higher prices paid by U.S. buyers of foreign products.”
Poor Marks for Harris, Too
Harris’ key economic proposals, including a ban on the practice of “price gouging” in the food and grocery industries and a $25,000 federal subsidy for first-time homebuyers, also receive poor marks from economists in both secular and Catholic institutions. Instead of bringing down the cost of living for working-class families in terms of housing and food prices, experts believe these measures will exacerbate existing problems.
The fundamental problem with a price-gouging ban is that it misidentifies the primary cause of high food prices as corporate greed, an assertion for which there is scant evidence, instead of on the laws of supply and demand. Profit margins in supermarkets are always thin: In 2023, the industry’s net profit margin was 1.6%, well below the average net profit margin of 8% for all public companies nationwide. Instead, evidence suggests that food prices have risen due to high demand caused by the pandemic and supply-chain disruptions caused by the virus and Russia’s invasion of Ukraine.
“Laws against price gouging are economically absurd,” Kling said. “These laws just make shortages worse: They reduce supply in times of need. They also encourage people to hoard price-controlled products instead of allowing people who need them most to purchase them.”
For Bachmann, the price-gouging-ban plan reveals poor economic intuition, but one that isn’t likely to do damage because, unlike Trump’s tariff plan, such a proposal would have to be passed in the U.S. Senate, which is highly unlikely.
“This is a completely empty promise,” he said. “She actually needs a clear majority, and she’s certainly not going to have that. It shows me that she’s not being advised by the right economists. This won’t solve the food crisis. If anything, what she should be looking at is antitrust laws and whether we had too many mergers in that area.”
Harris’ first-time-homebuyer subsidy was also met with deep skepticism. Again, the proposed solution misunderstands the problem: Housing prices have skyrocketed in recent years because of high demand and low supply, a problem that won’t be solved by giving homebuyers more money. Instead, the subsidy would further increase demand without addressing supply shortages, according to a Newsweek report. As a result, housing prices would likely skyrocket further.
“It’s a stupid proposal,” said Bachmann. “That’s a subsidy to people who have houses to sell, because we will just see prices going up.”
Kling agrees that the first-time-homebuyer subsidy would drive up prices further. The real problem in the housing crisis, in her view, is that most localities limit higher-density new housing. Harris has laid out a plan for building 3 million new units to fill the supply gap by offering a new tax incentive for building starter homes and cutting red tape and streamlining permitting processes. But for the plan to work, the federal government would need to override local zoning restrictions, which is a hazardous prospect from both a political and moral perspective.
“This would potentially violate the CST goal of subsidiarity,” she said. “Although one could argue that the local level is failing to correctly deal with housing policy.”
Positive Reviews for Expanding Child Tax Credit
There is one economic proposal put forth by both campaigns that has been lauded by economists: expanding the child tax credit (CTC). Currently a $2,000 benefit per child for families with children under 17, both campaigns pledge to dramatically increase this offering.
Harris has vowed to expand the CTC to $3,600, while boosting the number to $6,000 for families with newborns. Trump has stated an openness to boosting the figure to $5,000 at the urging of his running mate, U.S. Sen. JD Vance, R-Ohio.
While some economists worry about the potential cost of such programs, an expanded CTC would help lift potentially millions of children out of poverty. For Catholic economists, this makes these proposals a home run.
“There’s always a question of where the money will come from to cover such things,” Kling said. “But, in general, economic research points to great benefits from this. Supporting families is also a consistent goal of CST.”
Coronado points to the pandemic, during which the CTC was temporarily raised to $3,000 per child, as evidence that expanding the CTC can make a positive impact.
“I have no doubt that a similar result would follow raising the child tax credit again.”
Bachmann concurred, citing the potential positive effect boosting the CTC could have on the birthrate.
“I think it makes sense, especially for poor people,” he said. “If that makes it easier for people to have babies and raise families, that’s not only good from an economic perspective, but from a Catholic perspective as well.”
