Part II to The Core Of The Book: Summary Of The Authors’ Personal Positions On Many Of The Issues
Samuel C. Thompson, Jr. is a Professor of Law and the Director of the Center for the Study of Mergers and Acquisitions at Penn State Law. Anthony Miduri and Elijah Thomas are third-year Penn State Law students and Research Assistants to Professor Thompson.
I. Introduction
While The Core of the Book focuses principally on the views of Trump and Harris on particular issues, the positions of the authors of this article, Sam, Anthony, and Elijah, are presented on some of the issues. The book itself only contains Sam’s general view on every major issue. Since Anthony and Elijah are third-year law students and just getting started in their careers, one or both may choose not to express a view on an issue. If both choose not to express a view, only Sam’s view will be discussed. It must be emphasized that the views expressed on the various issues by Sam, Anthony, and Elijah are their individual views.
Also, it should be noted that any position expressed by one of the authors is that author’s opinion, which has not in any way been approved by any third party. In the interest of full disclosure, Sam is a lifelong Democrat, and Sam has not asked, and will not ask, about the political affiliation of Anthony or Elijah.
II. Chapter 3: The Economic Impact of the Tax Cut and Jobs Act (TCAJA)
Sam: As will be seen in Chapter 25, the business tax cuts and high-income individual tax cuts contained in the TCAJA would not be retained by Harris, and in my view, that is the right decision.
Anthony: Given the unstainable growth of the National Deficit and nearly all the research on the TCAJA finding that it disproportionately benefited the upper percentile, I believe that only pieces of the TCAJA should be retained going forward.
Elijah: I do not have any substantive thoughts on the TCAJA, although I wonder if the 2025 sunset was a strategic implementation to help the GOP secure the presidency in 2024.
III. Chapter 7: Minimum Wage
Sam: The federal minimum wage should gradually be increased to the point at which it would approximate, on an inflation-adjusted basis, the $7.25 amount that was first applicable in 2009. I would have a lower-tier minimum wage for teenagers and part-time workers.
Anthony: While I understand that increasing the minimum wage may harm competition between small businesses and industry conglomerates, I believe that no inflation adjustment in the fifteen years since the federal enactment of the minimum wage is unreasonable. Further, assuming it is constitutional, I second the idea of a second-tier minimum wage for both teenage and part-time employees.
Elijah: A two-tiered minimum wage system could be a reasonable compromise in the minimum wage debate. However, I harbor some doubts about the effectiveness of increasing the minimum wage for lower-skilled and less-educated workers if employers can retain the power to cut hours, hire fewer workers, and increase barriers to benefits to offset higher employment costs.
IV. Chapter 7: Jobs Generally
Sam: The disparity in the unemployment rate between the races must be eliminated. Even with the progress that has been made, in 2023, the unemployment rates were: Whites-3.3%, Hispanics-4.6%, and Blacks 5.5%. This is clearly a legacy of slavery.
Anthony: I believe that an increase in job opportunities will organically increase wages for working Americans in light of basic supply and demand concepts of economics.
V. Chapter 10: The Trump CARES Act
Sam: In its fight against COVID-19, Congress was correct in acting in a bipartisan way in quickly enacting the CARES Act.
Anthony: Given the need for immediate action during the COVID-19 Pandemic, I believe that the CARES Act provided necessary assistance to millions of Americans. It was largely a success given the timeframe.
VI. Chapter 11: The Bipartisan Infrastructure Act
Sam: Even though virtually everyone supports infrastructure spending, unless I am missing something, and frankly, I hope I am, it is wholly unacceptable for the Republican Project 2025 to completely ignore the need in this country for infrastructure spending and to only cite the Bipartisan Infrastructure Act in connection with a critique of the Act’s provisions on the Minority Business Development Agency.
Anthony: I believe that all infrastructure efforts should be pursued with a careful mind for the future. While many believe the initial investment into renewable energy sources, like solar, will not pay off, research from some of the leading universities in the country has proven otherwise.
VII. Chapter 11: The Biden-Harris American Rescue Plan
Sam: In my judgment, Congress did the right thing in enacting the Biden-Harris American Rescue Plan. As indicated above, even some Republicans in the House and Senate (all of whom opposed the ARP) are now supportive of some of its infrastructure provisions. Given the level of inflation shown in the October 2024 inflation report, it seems that the ARP has not, as some argued, led to a sustained high level of inflation.
VIII. Chapter 12: Tariffs
Sam: I am a strong believer in free trade, and therefore, I am generally against tariffs. I think there is very little support among the experts for the types of tariffs Trump has supported, and I think it would be bad for the economy if his proposed tariffs were adopted.
Anthony: While tariffs may increase government revenues and provide some economic benefits for domestic corporations, consumers often get stuck with paying higher prices, because domestic corporations may raise prices given the decrease in competition.
IX. Chapter 13: Housing
Sam: I am of the view that (1) adequate and affordable housing is a key issue for many Americans, and (2) Harris is correct to direct more attention than otherwise would be directed to the issue. It appears to me that she is bringing more attention to the homeownership issue than any other politician since Lyndon Johnson in the 1960s. Harris’s proposal to “provide first-time homebuyers with up to $25,000 to help with their down payments” is, in my judgment, a great idea; however, care will have to be taken to ensure that (1) the $25,000 actually goes to the purchase of a first home, and (2) the government takes an appropriate lien on the property to ensure a person does not use the program to simply get $25,000.
Anthony: I believe that there are takeaways from each of the candidates’ policies but, neither policy would suffice as they are currently written. One of the major issues causing the present hike in the housing market is the lack of supply, not demand. Thus, handing first-time homebuyers an extra $25,000 to buy their home will not resolve the lack of supply, it will only increase demand, which will drive the price up even more. Further, I am concerned that this plan may incentivize rash decisions and could leave numerous Americans with mortgages that they cannot afford. Instead, I would prefer a stipend that awards $25,000 to first-time homebuilders.
Elijah: I generally support governmental efforts to create more access to housing for the citizenry—so long as these efforts do not disincentivize the private sector from building and maintaining housing developments. Here, I am principally concerned with government efforts to fix rent prices. However, I would support increased efforts to make payments associated with home ownership tax deductible. Further, I am skeptical as to the actual benefit conferred on new home buyers with the $25,000 down payment assistance. I think that sellers would just increase the asking price of the home for first-time buyers by $25,000.
X. Chapter 14: The Federal Reserve Board (The Fed)
Sam: In my view, the Fed gets an A+ on the way it has responded to the COVID-19 crisis. It is hard to imagine that it could have acted more quickly or more effectively to the big spike in inflation as we recovered from COVID-19. The Fed has shown that it takes its independence seriously, and Chair Powell does not seem to be intimidated by Trump, which, indeed, he must not be. With respect to the Fed’s decision not to reduce rates at its July 2024 meeting and to reduce rates by 50 basis points (i.e., one half a percent) at its September 2024 meeting, it appears to me that on the basis of the data, the Fed was (1) right to be cautious at the July meeting and (2) right to be optimistic at its September meeting, with its 50 basis point cut.
XI. Chapter 15: Debt and Deficits
Sam: I strongly support the actions the Congress and the Trump administration took in enacting the CARES Act. I also strongly support the Biden-Harris administration and both parties in Congress in passing the 2021 Bipartisan Infrastructure Law (BIL). Further, I strongly support the American Rescue Plan (ARP), which was adopted with no Republican votes. However, I am in basic agreement with the bipartisan group of Representatives in the House who issued the letter entitled: “The Pressing Issue of the National Debt, which Could Do Irreparable Damage to Our Country.”[1] I also think that the Congressional Budget report entitled Options for Reducing the Deficit presents a strong case for addressing the deficit.
Anthony: I am of the view that when one spends more money than they make, they have two options: spend less or make more. While I understand that debt can and should be used as a financial tool, as the government’s annual interest expense approaches $700 Billion, I veer away from the “debt as a tool” concept. Although it would be much easier said than done, much of the deficit issue may be resolved through wiser spending by the government.
Elijah: I agree with Sam and the bipartisan members of Congress who have raised significant issues regarding the debt and deficit. I do not think that the Harris-Walz and Trump-Vance policy proposals are mutually exclusive. A party could reign in government spending and increase taxes to help with the debt issue. I would place more support behind wiser spending as opposed to increased taxes on citizens because I believe that the spending issue predominates the tax collection issue. I find it interesting that the Trump tax cuts are rebranded by the Harris-Walz administration as somehow increasing the tax deficit when it seems to me as though the main issue is outsized government spending.
XII. Chapter 16: Social Security
Sam: First, I would eliminate the current cap on the amount of labor income that is subject to the tax (as indicated, for 2024, the cap is $168,600 of labor income). I think there is merit to extending the tax to investment income, with the recipients of such income qualifying as beneficiaries of the Social Security system. I would also phase out Social Security benefits for retirees who have substantial other income.
Elijah: I would like to see some sort of significant Social Security reform. If the current system functions like a pension, in the sense that payments to current retirees are based on the current contributions of the workforce, then I believe that such a system will inevitably strain if life expectancy continues to increase past the legal age of retirement and if birth rates fall below the death rates. When Social Security was enacted in 1935, the retirement age and life expectancy were significantly closer than they are today.
XIII. Chapter 17: Medicare and Medicaid
Sam: Both Democrats and Republicans support some type of Medicare and Medicaid. So, the issue between Democrats and Republicans on these programs is how they should run, not whether they should run. In my judgment, nothing should be “off the table” in reforming the efficiency and effectiveness of these programs. Also, I think it is necessary to phase in higher premiums for Medicare as one’s income rises. Why should a 78-year-old former steelworker have the same cost for Medicare as 78-year-old Trump? In my view, we should have Medicare for All, and I am confident we will get there as a country. Interestingly, the United States is the largest country in the world without universal healthcare.
Anthony: I fully support any policy that makes these programs more effective and efficient. As for the Affordable Care Act, I disagree with the stance that it should be repealed, but I will concede that some revisions could make the program more effective.
XIV. Chapter 18: Education
Sam: Since local public schools are funded principally by local property taxes, the money a school district can spend on education depends, in large part, on the wealth of the people in the local community. In the interest of promoting economic growth and reducing income and wealth disparities, I propose that the Federal government ensure that every school district in America (1) has sufficient funds to make sure its students can “read, write, and do arithmetic” and (2) implements policies that are sufficient to ensure that the children in the district do in fact learn to “read, write, and do arithmetic.”
Anthony: The fact that the United States spends more per pupil than any other country on education but falls outside of the top on most educational rankings is very eye-opening. While I do not understand what closing the Department of Education would solve, we need to reinvent the wheel on how funds are allocated within the current education structure. I do agree with Sam that at a minimum, every school district should be capable of teaching their students how to read, write, and do arithmetic.
Elijah: I would reiterate Anthony’s point on United States spending per student here. To me, this illustrates that funding is not the predominant issue plaguing the classroom. Education is a complex issue because many factors outside of school may substantially influence a student’s ability to perform inside school. That being said, I would be in favor of gamifying the educational experience to increase meaningful student engagement—especially in the areas that Sam has identified as important.
XV. Chapter 19: Immigration
Sam: I certainly support ending illegal immigration; but it will take place when the people in the U.S.A are, on balance, living “On Top of the Hill,” and much of the rest of the world, including just South of the U.S.A., are, on balance, living at the “Bottom of the Hill.” It is interesting to note that the Immigration Modernization Act would have provided a pathway to citizenship for Dreamers, but the Senate’s 2024 Bipartisan Border Agreement did not. It is baffling to me why anyone could oppose a pathway to citizenship for Dreamers. In my judgment, the next Congress should take as its starting point in addressing the immigration issue the combined approaches of the Immigration Modernization Act and the Senate’s 2024 Bipartisan Border Agreement, which passed the Senate but was killed by Trump. As one might expect, I am against a Wall.
Anthony: Like Sam said, few would dispute that action should be taken to mitigate illegal immigration, and I am not one of the few. However, I do believe that such efforts should be done in a reasonable and respectful manner; not building an expensive and ineffective wall. As to legal immigration, the United States cannot pride itself on being a “salad bowl” and a “land of opportunity” if it is turning away those who properly apply for immigration to the country.
Elijah: I agree with Sam and Anthony that illegal immigration is an issue. My present discontent with the discourse surrounding illegal immigration is it focuses too much, in my view, on illegal crossings and the border. While illegal crossings have significantly increased in the past few years, which is not an issue to be taken lightly, I would like to see policy equally distributed between border enforcement and increased migrant processing capacity.
XVI. Chapter 20: Inequality
Sam: I strongly support policies that would reduce income and wealth inequality, including (1) the progressive tax policies discussed in Chapter 25 and (2) many of the policies advanced by Harris. My view of using reparations to close the wealth gap is evolving; however, here are a few observations. First, it is obvious that part of the economic gap between Whites and Blacks in America is attributable to systemic racism starting with slavery, continuing through Jim Crow (i.e., legal and non-legal discrimination) and now present with implicit bias. Because of this systematic racism and its after-effects, I believe that some type of reparations should be paid to those Blacks who, because of discrimination against their ancestors, have suffered and continue to suffer from that past racist system. To be clear, as a Black man who has had the opportunity to get a good education and who has not been handicapped by any racial discrimination, I would not, under any system I would construct, qualify for reparations. With respect to the Supreme Court’s anti-affirmative action decision in its 2023 Students for Fair Admissions, I believe that the Supreme Court has reinforced, and without reversal, likely has made permanent the growing economic gap between Whites on the one hand, and Blacks and other minorities on the other.
XVII. Chapter 21: Regulation
Sam: For understandable reasons, businesses want less regulation because they want to internalize as little as possible the costs of the detrimental externalities resulting from their activities. For this reason, some business leaders and their political allies have, at a minimum, overstated the regulatory “burden” businesses have experienced. This conclusion was reinforced by a conversation I had with a CEO of one of our leading publicly held firms concerning regulatory burdens imposed by the Obama Administration. He said that for the most part, the claims of over-regulation were principally about politics. Obviously, we live in a complex world, which becomes more complex daily. It is simplistic to assume that simple regulation can adequately deal with complex business activities. This point was made at a corporate tax conference in the 1980s by Ron Pearlman, the Assistant Secretary of Tax Policy in the Reagan Administration. In responding to the claim of some of the conferees that we needed to simplify corporate tax principles, the Assistant Secretary said something like: “It is unrealistic to think that simple corporate tax principles can properly address complex business transactions.” The same can be said about environmental regulation: “It is unrealistic to think that simple approaches to environmental issues can properly address complex business transactions.”
Anthony: First off, I’d like to echo Sam’s paraphrasing of Ron Pearlman’s comment regarding the effectiveness of regulations in today’s complex world. I cannot say whether it is a result of savvy litigators or an increase in the influence of lobbyists, however, simple policies are a thing of the past.
XVIII. Chapter 22: Antitrust
Sam: The prior Trump Administration, as a general matter, followed a traditional, bipartisan, approach to anti-trust enforcement, including taking action, inter alia, against price fixing and clear anticompetitive mergers. As indicated in Chapter 1, this is the fifth book I have done on the economic positions of the presidential candidates, and the current bipartisan support of Chair Kahn of the Federal Trade Commission (FTC) is receiving, including from Republican Vice Presidential candidate, Vance, is, I believe, the first time I have seen strong agreement on an important economic issue coming from some very conservative Republicans and some very liberal Democrats.
Anthony: I think it is fantastic to see Bipartisan support on an issue that impacts the daily lives of every American citizen. While antitrust enforcement alone will not solve the issue of high prices, industry competition tends to result in lower prices for consumers. As such, I fully support stricter enforcement of the antitrust laws.
Elijah: I would reiterate Sam’s and Anthony’s praise of bipartisan support for antitrust enforcement. I also fully support stricter antitrust enforcement.
XIX. Chapter 23: Voting Economics
Sam: In 2008, the Supreme Court of the United States, in Crawford v. Marion County Election Board, rejected a constitutional challenge to an Indiana voter I.D. law that required a personal identification document, such as a driver’s license, as a condition to vote. Thus, the court found that the law was legal. Justice Souter dissented in the case, and without mentioning supply and demand curves, he provided the following succinct economic analysis of the law as one of the bases for his dissent:
Tens of thousands of voting-age residents lack the necessary photo identification. A large proportion of them are likely to be in bad shape economically . . ."No doubt most people who don't have photo ID are low on the economic ladder") . . . "[W]e would ignore reality were we not to recognize that this system falls with unequal weight on voters . . . according to their economic status"). The Voter ID Law places hurdles in the way of either getting an ID or of voting provisionally, and they translate into nontrivial economic costs. There is accordingly no reason to doubt that a significant number of state residents will be discouraged or disabled from voting.[2]
It is interesting to note that in this short passage, Justice Souter uses the word “economic” four different times.
Turning to my economic take on this case, I would like to point out that a fundamental principle of economics is that the higher the price of a good, the less consumers will demand of the good. Voting is a Public Good, and there is no reason to believe that this basic rule of demand does not apply in determining the quantity of voting. Thus, for example, assume that in a basic microeconomic graph of demand and supply as shown in Chapter 2, (1) the cost of voting is on the vertical axis and (2) the quantity of voting is on the horizontal axis. In such a case, the demand curve for voting is downward sloping from left to right, which means that the higher the costs of voting the lower the demand by eligible voters to vote.
Thus, from a purely economic perspective, voter suppression laws are designed to increase the costs of, and, therefore, the amount of, voting, particularly from those voters who are likely to oppose the party that enacts the laws.
While the prevention of voter fraud is a legitimate goal, there does not seem to be much voter fraud. Consequently, the “prevention of fraud” argument made by proponents of voter I.D. and similar laws is a pretextual justification for a real motive of (1) raising the costs of a vote, and, therefore, (2) suppressing the demand for votes, by those who are unlikely to support the proponents of such laws.
Thus, in Marion County, Justice Souter has done the correct economic analysis of the law, and in my view, sooner or later, the Supreme Court will, on economic grounds alone, recognize that such laws unconstitutionally restrict voting.
XX. Chapter 24: Tax Policy, The Highest Marginal Rates
Sam: The current maximum tax rate on individuals is 37% and Harris has proposed to increase it to 39.6%, the pre-Trump maximum rate. In the Clinton vs. Trump version of this book, I argue for an increase in the progressivity of the Federal Income Tax that would add a 45% and a 50% marginal rate for super-high levels of income. For the reasons stated in that book, I still believe that this is a sensible policy, and I also discuss in this book why I still think that to be true.
Anthony: I would like to state that raising individual tax rates can be avoided by either (1) reducing government spending, or (2) raising the corporate tax rate. However, in addressing the top marginal rate, if an adjustment must be made, I believe that Congress should create another tax bracket. While I am in no position to propose the exact structure for this bracket, I feel that some references may further explain my proposal. In 2024, the maximum marginal tax rate does not kick in until taxable income reaches $609,351. Hypothetically, this new bracket’s taxable income threshold could begin at $1.2 million, nearly double that of the current highest bracket, and Congress could then assess a marginal tax rate similar to what Sam suggested (45-50%) to those who exceed that mark. By doing this, tax revenue would increase, and the effective tax rate of multimillionaires would be a much more logical number than it presently is.
XXI. Chapter 24: Tax Policy, Taxation of Capital Gains
Sam: I do not think Harris goes far enough on the taxation of capital gains with her proposed 28% rate. I would tax capital gains at ordinary income rates for taxpayers making more than $1 million in taxable income. I would also consider extending the holding period for long-term capital gains to two years.
Anthony: I believe that increasing the tax rate on capital gains of millionaires would be a good idea. However, Harris has proposed both an increase in the capital gains rate and an increase in the marginal rate for millionaires. I am of the view that only one of these policies should be enacted, not both.
XXII. Chapter 24: Tax Policy, Taxation of Corporate Income
Sam: In the 2016 version of this book, I explained that in my view, the 35% corporate tax rate that was then applied was too high, and I argued that we should broaden the base and reduce the corporate rate on a revenue-neutral basis. In the TCAJA, Congress reduced the corporate rate to 21% (which I think is too low), but Congress did not significantly broaden the corporate tax base by eliminating loopholes. Assuming that there are currently many more loopholes in the U.S. corporate tax than in the corporate tax systems of our competitors, one way of compensating for such loopholes would be to raise the corporate rate from 21% to a higher rate, possibly to the 28% rate proposed by Harris.
Anthony: The current corporate tax rates result in a corporation like Walmart being assessed a 21% tax rate and the cashier at Walmart, with taxable income of $45,000, being assessed a marginal rate of 22%. I do not see how this is an equitable policy. If Congress were to slightly raise the tax on corporations, it could significantly lower the tax on individuals. I agree that there are economic incentives to a lower tax rate for corporations which should not be disregarded. However, before the TCAJA, the corporate tax rate had exceeded 30% dating all the way back to 1941, and throughout that time, the United States remained a very successful nation.
XXIII. Chapter 24: Tax Policy, What is Sam’s Take on the Taxation of Dividends?
Sam: For the following reasons, high income taxpayers should be subject to taxation on dividends at standard rates. First, corporations may receive certain tax preferences, such as accelerated depreciation, and therefore, the effective corporate tax rate is generally less than the statutory rate. Second, dividends are not taxed until paid. Third, if the shareholder holds appreciated stock until death, there is a step-up in the basis of the stock to its fair market value at death, and therefore, the shareholder’s beneficiary can sell the stock and avoid both the capital gains tax and the tax on dividends. As noted below, Harris has proposed to repeal the step-up in basis at death for certain high-value estates, and I support this policy.
XXIV. Chapter 24: Tax Policy, The Estate Tax
Sam: While it may serve as powerful political rhetoric, it seems clear that repealing the estate tax has nothing to do with saving the family farm as many Republicans claim. On this point, David Cay Johnston reports that Professor Michael Graetz of the Columbia Law School, who was a Treasury tax policy official in the first Bush administration, has said: “The super-rich were using the myth about family farms to get a tax break for themselves.” Also, economists have noted that there is evidence that large inheritances can reduce the incentives of the heirs that receive them. For this reason, several very wealthy and successful businesspeople have been strong supporters of the estate tax. They include Warren Buffett, George Soros, Bill Gates Sr., and Andrew Carnegie. Buffett has said that repealing the estate tax is “the equivalent in economic terms of choosing our Olympic team by picking the eldest son of the gold-medal winners in the 2000 Olympics.” The bottom line is that there is no sound argument for repealing the estate tax, and Harris is clearly correct on this issue.
Anthony: My initial inclination is to side with Harris regarding the estate tax, but I do feel for those clamoring to limit estate taxes. Therefore, I believe that if we were to revert to the pre-TCAJA rules regarding the estate tax, the step-up in basis at death rule should also be retained.
XXV. Chapter 24: Tax Policy, The Step-Up in Basis at Death Rule
Sam: In my view, the Harris proposal of treating assets held at death as being disposed of in a taxable event could lead to significant disputes between taxpayers and the IRS concerning the value of property. However, if the deemed sale at death rule were limited to estates that are subject to the Federal Estate Tax, and, therefore, are subject to being valued, the valuations of the property would presumably be the same for both the Estate Tax and the Income Tax, and there would be no significant additional administrative burden in determining the value of the property in the estate. Thus, I am of the view that the Harris rule should be limited to estates that are otherwise subject to the Estate Tax.
Anthony: I would retain the step-up in basis at death rule as it currently stands. If you are going to tax an estate worth many millions of dollars, liquidity is bound to be an issue. Inevitably, the handlers of a tax-paying estate are going to have to sell some assets to cover the estate tax. I believe Section 1014 plays a key role in fair treatment because, without it, an individual would be forced to pay a tax on capital gains just so he or she could pay the taxes on the estate.