Today, Explained - It's the economy, stupid

Episode Date: October 28, 2024

Economic concerns are shaping this year’s election, especially in Nevada. As candidates promise no taxes on you-name-it, it’s a glimpse into how each would reshape American taxes while in office. This episode was produced by Peter Balonon-Rosen, edited by Amina Al-Sadi, fact-checked by Laura Bullard, engineered by Patrick Boyd and Andrea Kristinsdottir, and hosted by Sean Rameswaram. Transcript at vox.com/today-explained-podcast Support Today, Explained by becoming a Vox Member today: http://www.vox.com/members Campaign material ahead of a Turning Point Action 'United for Change' campaign rally in Las Vegas. Photo by PATRICK T. FALLON/AFP via Getty Images. Learn more about your ad choices. Visit podcastchoices.com/adchoices

What a weekend for this presidential race of ours. It started Friday in H-Town with Beyonce. I'm not here as a celebrity. I'm not here as a politician. I'm here as a mother. And someone out in Michigan might have been a little jelly. Kamala is at a dance party with Beyonce. Kamala.

Man Who Refuses to Say It Right had another rally at Madison Square Garden Sunday night. It opened with more jokes about brown people. There's literally a floating island of garbage in the middle of the ocean right now. Yeah. I think it's called Puerto Rico. But finally the former president took the stage and opened with... I'd like to begin by asking a very simple question. Are you better off now

than you were four years ago? Because at the end of the day, everyone knows that it's all about the economy, stupid. And nowhere is that more obvious than in Nevada. The latest in our Battleground State series on Today Explained.

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for the season raise your game to the next level this year with bet MGM a sports book worth a slam dunk and authorized gaming partner of the NBA bet MGM.com for terms and conditions must be 19 years of age or older to wager Ontario only please play responsibly if you have any questions or concerns about your gambling or someone close to you please contact connex ontario at 1-866-531-2600 to speak to an advisor free of charge bet mgm operates pursuant to an operating agreement with i gaming ontario today explained battleground states Today Explained. Battleground States. Nevada. I'm John Ralston. I'm the CEO and editor of the Nevada Independent, the only statewide news organization in Nevada.

Incredible. So I imagine this is a busy time for you. Are you busy? That would be an understatement. I am trying to oversee a news organization, track early votes, and deal with a newly minted teenager. So yeah, I'm busy. All right, well, let's skip the teenager for a minute here and just talk about the election. You, sir, have a reputation for calling these kinds of things in Nevada. What's it looking like just over one week out? Well, I have a pretty good prediction record, but I don't do it a week out or two weeks out. I do it three days before the election.

We don't have enough data to really make a prediction yet, but the Republicans are looking better in the early count than they ever have. On the other hand, we just recently went to a mostly male ballot state. And so there's some thought that younger voters are going to vote later, that all of the independents, and there's been an explosion of them in Nevada, are going to go the Democrats' way. So they haven't given up yet, but I think they're concerned. Can you let us know, just from the way the two candidates have been campaigning, how important Nevada seems to be to this 2024 presidential election? Well, I like to tell people every cycle since 2008 how much we matter, since we're one of the few battleground states. And, you know, we don't have as many electoral votes

as Pennsylvania or anybody else. Just six votes. But we are really a mirror of the country demographically. Las Vegas, which is, you know, the cliche, a slot machine in every drugstore. And there's the hookers on every street corner. That just doesn't apply. It's a demographic malting pot, a very large Hispanic population,

a substantial Asian and African-American population, and a service worker economy that is both good for the Democrats and good for Trump, who likes to say, I love the poorly educated. We won with highly educated. We won with poorly educated. I love the poorly educated. What are the poorly educated out there most concerned with this election season? Well, I wouldn't call them that. Donald Trump and you have. So I'm separating myself from you on this, man. But what they're most concerned about is what they're most concerned about everywhere else, which is the economy. Tacos used to be, what, a dollar, a dollar fifty? After the pandemic,

I mean, they don't go under $3.50 to $4, you know? Inflation. People have to use a credit card to, you know, pay groceries and bills, and they got to take away things that they like to do. That's not living. That's not quality of living. We were disproportionately smashed by COVID. Overnight, casinos shut their doors. You're looking at the Bellagio, now boarded up. Nevada Governor Steve Sisolak asked every casino in the state and all non-essential businesses to close.

If your business brings groups of people together, it should not be open. Las Vegas Strip, which is the economic engine of Nevada, shut down for a couple months. The sounds of birds echo the Strip. Downtown casinos are lit up, but the slots are shut off and the tables empty. A lot of people lost their jobs. Unemployment was up to 30 percent. Right now, Nevada has the highest unemployment rate in the nation, with about one in four people now unemployed. And even though it's come down a lot, it's down to about 5 percent now.

That's still one of the higher unemployment rates in the country. The pandemic just, a lot of people are still recovering. The other adjunct to that is housing. People are having trouble buying houses, renting houses, renting apartments. Washoe County has seen the medium home price spike from $150,000 in 2011 to more than $500,000 now. And that is affecting, I think, a lot of lower income voters. And if you look at the two economic plans or policy proposals that these two candidates are pushing, it almost feels like they're talking directly to Nevada voters, doesn't it? Looks like both campaigns woke up a few weeks

ago and saw the numbers I'm talking about that showed housing a big issue. And so Trump essentially piggybacked off of the Republican governor here, who said they just need to release more federal land. And on that land, we're gonna build housing. We're gonna have housing built. And it'll be great for Nevada, and it'll be great for other areas. 87% of Nevada is federal land.

And so that's one solution. And Harris has done more traditional democratic kinds of rhetoric about helping people get into their homes, making sure people stay in their homes. My administration will provide first-time home buyers with $25,000 to help with the down payment on a new home.

But neither of them have provided really many specifics, which is what you'd expect. Hmm. What about the plans more targeted to, say, income? I know we've got the no taxes on tips, right? Both candidates are proposing that. Is that, that feels like a Nevada thing. That feels like a Vegas thing.

That feels like a service industry thing. I think you're right on all counts. Trump says that this waitress and whether she's real or mythical, it's always hard to tell what Trump approached him at his property here in Vegas and said, can you do something about this? I said to her, let me just ask you a question. Would you be happy if you had no tax on tips? She said, what a great idea. I got my information from a very smart waitress. Whether that happened or not, I don't know. But I think in terms of a political pander, it's a pretty smart play by the Trump campaign.

And we need to spread the word so that every time you leave a tip for the next five months, you put on the receipt, vote for Trump because there's no tax on tips. The Harris campaign originally poo-pooed this, but later jumped on board and said this is a great idea. Raise the minimum wage and eliminate taxes on tips for service and hospitality workers. Has this cut in favor of Trump? I don't know. But I will tell you this, that in an election that could be very close, some people think it could be as close as 5 or 10,000 votes out of about 1.3 or 4 million cast, every little bit could make the difference. And it's going to be hard to say what the one issue was, the one move was that made the difference. If Trump does indeed succeed and wins over Nevada, what do you think that will have said about

his campaign, about his appeal when he lost there in 2016 and in 2020. But he didn't lose by a lot. He lost by two and a half points. This would say that the state has changed. For the first time in two decades, in 2022, we elected a Republican governor. That Republicans now can say they have a chance in Nevada, that the so-called Harry Reid machine is not omnipotent, that it can be beaten in a presidential race.

And if Kamala wins, the process of elimination dictates that the opposite will be true, that this will still be the Harry Reid state, the machine that Harry built. I think the narrative will be, even in adverse economic times, even in times when the demographics seem to have shifted a bit, right, the machine still knows how to get its voters to the polls, whether it's early in-person voting or mail ballots or on Election Day, just enough to keep the state for every cycle since 2008 in Democratic hands. Do you think that there's a lot of voters out there in Nevada who are still trying to figure this one out, who are still undecided people who we know will show up to vote on the 5th, but are still waiting to hear more from these candidates? And if so, what do you think will push them in either direction? Who are these people who can be undecided in this race at this point, right? Most of the polling

shows that there's about 5% or so undecided, some polls at 7 or 8%. And so I think every little bit could matter. Are these service workers, these blue collar workers who back in the day were called Reagan Democrats, will they go for Trump? If they listen to if are you better off now than you were four years ago, maybe they will vote for him. And these plans, no tax on tips, you know, more housing, freeing up federal land. Is that breaking through? I don't think, I mean, it's possible, as I said, if it's a very close race here, which it could be, it's gonna be very difficult to pinpoint what the tipping point was. Okay, John, really appreciate your time. And it sounds like you've got a lot to do with, I'm sorry, we didn't get to talk about your teenager, but please do give them our regards.

She's a wonderful kid and keeps me busy. All right. All the best to her. Thanks so much for your time and all the best in the next few days. Thank you. I will need it. John Ralston, editor and CEO of The Nevada Independent, thenevadaindependent.com. He's also father to a newly minted teenager.

When we're back on Today Explained, we're going to ask how these Harris and Trump economic proposals are landing in the rest of the country. Support for Today Explained comes from Ramp. Ramp is the corporate card and spend management software designed to help you save time and put money back in your pocket. Ramp says they give finance teams unprecedented control and insight into company spend. With Ramp, you're able to issue cards to every employee with limits and restrictions and automate expense reporting so you can stop wasting time at the end of every month. And now you can get $250 when you join Ramp. You can go to ramp.com slash explained ramp.com slash explained r a m p.com slash explained cards issued by Sutton Bank member FDIC terms and conditions apply. Support for today explainedained comes from Ramp. If you're a finance manager, you're probably used to having to toggle between multiple disjointed tools just to keep track of everything.

And sometimes that means there's limited visibility on business spend. I don't know what any of that means, but Ramp might be able to help. Ramp is a corporate card and spend management software designed to help you save time and put money back in your back pocket. Ramp's accounting software automatically collects receipts, categorizes your expenses in real time. You can say goodbye to manual expense reports. You will never have to chase down a receipt again. You can customize spending limits and restrictions

so your employees are empowered to purchase what your business needs. And you can have peace of your business needs and you can have peace of mind. And now you can get $250 when you join RAMP. You go to ramp.com slash explained, ramp.com slash explained, ramp.com slash explained. Cards are issued by Sutton Bank, a member of the FDIC, and terms and conditions do apply. Today, explain Sean Ramos firm with Richard Rubin. He reports on tax policy at the Wall Street Journal. And lately, that's meant he's spent a lot of time thinking about the Trump and Harris economic proposals.

Trump wants to raise tariffs on imports and cut income taxes significantly across the board. Harris wants to provide targeted tax cuts to households and expand some government spending and raise taxes on rich people. They're very different candidates on the economy and on taxes and spending, but they have this common theme of saying, vote for me and I'll give you this policy, this change, this tax credit, this deduction, whatever. They have this common theme of offering something to people. It feels like, at least, you know, for the past two-ish months, these two have been trying to one-up each other in terms of the giveaways,

the tax rebates, the freebies. Has it felt that way to you, too? Yeah, and the Trump ones in particular are very ad hoc. So it'll be just a random speech at a rally and he's in Detroit, so he's going to say we should let car loan interest be deductible. So we're going to make it fully deductible, the interest payments. That's going to revolutionize your industry.

Or he's in Nevada, so he says we should not charge taxes on tips, people making tips. He's got these very targeted pitches. They're very bumper stickery. They these very targeted pitches. They're very bumper stickery. They're very slogany. They're very catchy and memorable. And then she's come up with some as well. She took the no tax

on tips. She's talked about the $6,000 tax credit for parents of newborns. $6,000 in tax relief to families during the first year of a child's life. Now think what that means. Basically what we will do is allow Medicare to cover in-home health care. First-time homebuyers, a $25,000 down payment assistance.

We will expand the tax deduction for startups to $50,000. They're very easy to understand policies and promises, and they work well in that stump speech, bumper sticker, slogan, 30-second ad environment. No taxes on tips, overtime, or Social Security. I'm Donald J. Trump, and I approve this message. There was a while where it felt like Trump every week had something new that he was coming out with. Former President Donald Trump has proposed tax breaks for home generator costs in hurricane-affected states if he's re-elected. They're not fully thought out proposals. So when he says we're not going to tax overtime, there's not a white paper, there's not a piece of legislation that says, well, it's only for workers who are eligible for overtime pay and it's both income and payroll taxes or one or the other.

These are not fully specced out proposals. These are rough sketches of things. They said, how did you come up with this thing on deductibility of interest on automobiles? I said, it was just an idea I had, but I had a better idea because... And Harris, a little more planned out. She did put out like this, what,

80-page economic agenda, yeah? Right. It's definitely more typical of the level of detail we see in a campaign. And she has the advantage in that respect of the fact that she comes from an administration that put out a giant budget right so she can essentially pick and choose from that and add some other new things to it as she lays out her policies and those things have all been at some level vetted and thought through and detailed, even if that's not ultimately what she proposes next year if she wins

or what gets enacted by Congress. And do you get the feeling that she's doing this to sort of compete with Trump or is she doing this because people want to know what she's all about? Or maybe both? You always see this in campaigns. You see it in a class president campaign in eighth grade, right? I think I promised once that I would try and get us like a longer recess or something

when I was running for student office. Did it work? I won! And did you get longer recess? No, but I had good ideas. Right. So this is basically, this is something like that. You know, tater tots for all.

That's where we are. We call it universal basic tater tots for all. That's where we are. We call it universal basic tater tots. But there is some element of that. We're obviously, there's more zeros here. And it's serious because Congress can actually do some of this. And if you go back the past few presidents, Clinton, Bush, Obama, Trump, Biden, all campaigned on a series of promises to voters. I'm going to cut middle class taxes. People who pay the bills ought to get some money back. It's a difference of opinion. He wants to grow the government and I trust you with your own money. I'm going to expand health insurance. Make sure that insurance companies can't

discriminate on the basis of pre-existing conditions. I'm going to provide stimulus checks. Money that will go out the door immediately. Tell people who are in real trouble. And a lot of them tried to do them and a lot of them delivered. So the stuff we're hearing now that's not fully fleshed out, three, four months from now when there's a new president and a new Congress is very much live and very much real, and some of it is likely to happen. Big chunks of the tax cuts that Trump put into effect in 2017 are scheduled to expire at the end of next year. So that's the context for the proposals that candidates are coming out with is that something is going to happen on the tax code next year.

Well, in that case, I guess it's worth, you know, properly examining each one. How would you characterize each candidate's approach to tax breaks or free money? Like, what are the core differences between Harris's, you know, targeted cuts and tax hikes on the rich and more spending versus Trump's, you know, income tax cuts and more tariffs on China? Yeah, so I think one key difference is, and pardon me for using tax nerd speak, but it's important,

is the difference between tax credits and tax deductions. Tax credits are subtractions from the amount of taxes you owe, right? So it takes your total, a $5,000 tax credit would take your tax bill from $7,000 to $2,000. A deduction is a subtraction of the amount of income. So a $5,000 deduction would take your taxable income from $7,000 to $2,000, and then you pay taxes on that $2,000. Harris is much more in the credit side of things. Trump is much more in the deduction side of things.

So Harris's proposals, particularly the child tax credit, are really beneficial for lower and middle income households, particularly when she talks about refundable tax credits. Trump's proposals are very much in the nature of deductions and exemptions. So you wouldn't be taxed on overtime pay. You wouldn't be taxed on social security benefits. You wouldn't be taxed on generator purchases, whatever he's talked about. Those all lower your taxable income and can get your tax bill down to zero,

but wouldn't make it negative. What about the deficit? Famously not a popular thing to care about. So there's a nonpartisan estimate that, again, these are estimates, said that Trump's policies would increase deficits by $7.5 trillion over the next decade, and Harris's would do so by $3.5 trillion. And just to be clear, that's on top of the $22 trillion in additional deficits that would happen if Congress does nothing. For all the differences between the two candidates' plans,

there are some key similarities. They both don't want to tax tips. They're both trying to do giveaways. They're both going to increase the deficit. What do the differences, let's say, or the similarities, tell us about their priorities once they win? That's a good way of thinking about it. I think for Trump, the priorities are cut taxes and do it bigly, so to speak.

For Harris, I think you'll see her priority is to try to pair up the policies as much as possible. So to pair a giveaway with higher taxes on rich people and corporations. We've seen her priorities be what they talk about as the care economy. So expanding Medicare to cover in-home care. The child credit expansion is helping parents care for newborns, helping bridge costs that she's talked about. Which one would Americans feel more, the credits of Harris or the deductions of Trump? Well, because a lot of these proposals are so targeted, it really depends. If you're the parent of a newborn and right now you're getting at most $2,000 from the child tax credit and Harris bumps that to $6,000, well, yeah, you're going to feel that $4,000 a lot.

If you're a middle to higher income tipped worker or someone who's making overtime pay or a Social Security recipient who would have to pay lower taxes, then you'd pay less under Trump and you'd notice that more. And that means how you feel them depends on whether you fall into these targeted demographic groups or not. Do we know which bucket is resonating more with voters outside Nevada, which we talked about in the first half of the show? Yeah, the tips thing is really popular. The Social Security benefit thing is very popular, taking away income tax on Social Security benefits, even if that increases the national debt. And that's a key piece, that people are

eager to get the benefits, tax cuts, and aren't really so concerned themselves about the other side of the ledger. People like to get things. Yeah. I mean, right?

Like, it's Halloween, right? So people like to go. We have a whole holiday where you walk up people's houses and they give you stuff. We love that. I think there's big differences between the candidates. And depending on where you are as a person, it's pretty easy to figure out. If you're voting on economic policy, if you're voting on economic policy, if you're voting on economic issues,

where you go, people just have different taste buds, so to speak. Richard Rubin, WSJ.com. Peter Balanon Rosen made our show today. Amina Alsadi edited. Laura Bullard factored. Patrick Boyd and Andrea Christen's daughter mixed. We've got one more of these Battleground State shows for you.

Michigan is coming the day before Election Day on Today Explained. you