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Harris economic proposals envision tax cuts, subsidies

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Kamala Harris campaigning in Maryland in August 2024
Kamala Harris during an event in Maryland on Aug. 15, 2024.

Aaron Schwartz/Photographer: Aaron Schwartz/Blo

Vice president Kamala Harris will propose sweeping new federal subsidies for parents, homebuyers, and Americans with low-incomes alongside new programs to curb increases in rent and grocery prices as she seeks to convince voters that she would act swiftly to address one of their top concerns — rising consumer costs.

The Democratic nominee, who will unveil the plan Friday afternoon in North Carolina as part of her three-month sprint to Election Day, plans to target some of the core expenses of daily life — the costs of food, housing and prescription drugs — while overhauling the federal tax code.

Harris’ plan would expand the Child Tax Credit to $3,600 from $2,000 per dependent, with a super-sized $6,000 credit for newborns. Harris also proposes expanding the Earned Income Tax Credit for low-wage workers who don’t have children, and increasing subsidies for those who purchase insurance on federal health exchanges.

The vice president also envisions new price controls on groceries, and expanding limits on out-of-pocket prescription drug prices to all Americans. Tens of billions of federal dollars would be spent to improve the supply of federal housing, while Harris is pledging to implement new rules to prevent corporate and landlord price gouging. 

The effort comes as the Democratic presidential nominee rapidly tries to define herself for the American public, with less than three months until the November election. Her message is an acknowledgment that many Americans are unhappy with the economic status quo, and a marked shift from President Joe Biden’s rigorous defense of their administration’s economic record, which contributed to Democratic leaders’ concerns that voters saw him as out of touch.

Economists are divided on the practicality and efficacy of some of Harris’ proposals — and particularly price cap efforts.

The World Bank in 2022 described temporary price controls as “the second best option,” given they can be inefficient and costly, though the bank acknowledges they have a role in keeping inflation expectations in check — provided they are designed well. Her $25,000 proposal to assist first-time home owners secure mortgages threatens to further push up housing prices.

Other elements of Harris’ proposals would carry a substantial price tag. 

The expanded Child Tax Credit alone would likely cost hundreds of billions or trillions of dollars over the next decade, though it could garner bipartisan support: Trump’s running mate, Senator JD Vance, also proposed increasing the credit to $5,000 per child. The politically popular tax break is set to decrease in value at the end of 2025, meaning that whoever wins the White House will face pressure to revive it.

Still, advisers believe that concentrating on pocketbook issues offers a favorable frame to voters who still rank the economy among their biggest concerns. It’s also an opportunity for Harris to highlight the years she spent as California attorney general advocating for consumers in price-fixing cases.

And even as economists point to supply-chain disruptions and the federal government’s pandemic-era stimulus spending as major factors in price increases, Democrats argue that inflation, which peaked at a 40-year high of 9.1% in mid-2022, has been driven by corporate profit-padding. Many Americans agree, Harris’ advisers have found in polling and focus groups.

Trump, looking to counter expected attention regarding the proposals, held a press conference Thursday at his New Jersey golf club where he labeled the Harris plan as “communist” and warned efforts to control grocery prices would lead to “food shortages, rationing, hunger, dramatically more inflation.”

Light on specifics

While Harris will offer some policy details in her speech, slated for Friday afternoon in Raleigh, she’s not expected to weigh down the address with too many specifics. Instead, allies say, it’s more important politically to deliver a message showing that she understands voters’ economic struggles and will fight to alleviate them.

“We’re more interested in the storytelling than the precise policy,” said Adam Green, co-founder of the Progressive Change Campaign Committee, which has worked closely with the Harris campaign on economic messaging, drawing on weekly polling conducted with Data for Progress. Harris is right to start with grocery prices, he said, because they are “the number-one pain point in peoples’ lives by far.”

Harris heads into Friday’s speech with a narrow polling advantage on the economy, a rare position for a Democratic presidential candidate. 

Forty-two percent of registered voters surveyed for a Financial Times-University of Michigan Ross School of Business poll released Sunday said they trust her to handle the economy, while 41% said former President Donald Trump would do a better job. Biden trailed Trump by six points when the survey was last conducted, in July. 

Economic wariness

Recent U.S. economic data has generally been strong. Stocks climbed Thursday after reports showed that retail spending and the labor market continue to be healthy. Underlying U.S. inflation eased on an annual basis in July for the fourth consecutive month, the Bureau of Labor Statistics reported Wednesday, keeping the Federal Reserve on track to cut interest rates in September. 

Still, there have been a few signs of concern that have analysts raising the odds of a recession. The unemployment rate rose in July to 4.3%, the highest level in three years.

Despite the generally positive economic news, voters have a bleak outlook. In the Financial Times-University of Michigan poll, 73% of those surveyed described American economic conditions as negative. 

While Harris is promising to fight drugmakers from the Oval Office, she can also point to what the Biden administration has already done to cut costs. For the first time since he dropped out of the presidential race, Biden joined Harris for a public appearance on Thursday to roll out the lower prices secured from pharmaceutical companies for participants in Medicare Part D.

Harris says she would push the government to negotiate additional savings faster, and cap the monthly cost of insulin at $35 for all Americans.

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IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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