Both Donald Trump and Kamala Harris have been promoting the idea of hyper-targeting tax subsidies to specific activities and groups, with Trump being more aggressive in this approach. This tactic raises concerns about fairness and efficiency in the tax code and the implications of favoring certain individuals or industries over others.
The candidates’ proposals would make certain income tax-free for specific groups, such as tipped workers, while leaving out others who earn the same amount through wages. Trump has also promised to make in vitro fertilization (IVF) free, which raises questions about why this treatment would be subsidized while other medical treatments are not.
The hyper-targeting of tax subsidies is seen as a way to attract specific groups of voters, such as tipped workers in swing states like Nevada and suburban women who may reject Trump’s views on abortion. However, the approach may lead to unintended consequences and create disparities in the tax code.
In addition to targeting specific groups, Trump has also proposed a deduction for the costs of raising a newborn, which could benefit middle- and upper-income families but may not be useful for low-income families who would benefit more from the standard deduction. The proposal could potentially add to existing subsidies for childcare and newborn care, raising questions about the equity and effectiveness of the tax code.
While candidates could avoid these inequities by broadening government subsidies, this approach could significantly increase the cost of these subsidies and raise other questions about government intervention in specific industries or activities. Trump’s proposal to lower the corporate tax rate for firms that make their products in America could also lead to unintended consequences and challenges in defining what qualifies as “making” products in America.
Overall, the trend of hyper-targeting tax benefits in campaign proposals is seen as unfair, inefficient, and potentially difficult to administer. The proposals have the potential to create a complex and convoluted tax code that could lead to issues with compliance and oversight. The focus on specific activities and groups may also raise questions about the government’s role in providing subsidies and incentives in certain areas.
