Kamala Harris Is More in Line with Tim Walz on Taxes Than Josh Shapiro

In selecting Gov. Tim Walz (D-Minn.) as her vice presidential running mate in November, Kamala Harris selected a vice presidential candidate whose record on tax policy is more in line with hers than that of another declared finalist, Gov. Josh Shapiro (D-Penn.). Gov. Walz, like Vice President Harris, has a well-documented history of supporting tax increases and progressive tax proposals.

But Shapiro, arguing for an acceleration of his predecessor’s gradual reduction in corporate tax rates, has recently made statements about the economic benefits of reducing the tax burden on businesses and increasing competitiveness through lower rates. Those comments, if Shapiro were chosen as Harris’ vice presidential running mate, could be used against Kamala Harris and her proposal to raise the federal corporate tax rate to 35%.

Meanwhile, Governor Walz has a tax policy that, like Harris, is geared toward the goals of the Democratic Party’s progressive base. For example, in 2023, Governor Walz and the Democratic-controlled Minnesota Legislature spent nearly $18 billion in a single year while enacting nearly $10 billion in higher taxes.

“While this year’s tax increases are bad, what will really shock Minnesotans is what happens in the next budget when we don’t have a huge surplus to spend,” Sen. Steve Drazkowski (R-Mazeppa) said last year in response to tax increases pushed by Gov. Walz and Democratic lawmakers. “Every Minnesotan will feel these tax increases, whether they shop at the Metro, buy a new car or update their bills,” added Sen. Bill Weber (R-Luverne).

During Tim Walz’s tenure as governor, Minnesota was an outlier nationally, one of the few states where residents didn’t get tax breaks. “Most states have cut taxes at least once since 2021, and a renewed push for tax competition has taken hold in both red and blue states,” writes Jared Walczak, vice president of state projects at the Tax Foundation. “Twenty-eight states have cut personal income tax rates, 15 have cut corporate tax rates, and others have cut sales tax rates or focused on breaks. Under Gov. Tim Walz, Minnesota was an outlier, one of the few states to raise taxes in recent years—even though the state has run large surpluses.”

“In recent years, Minnesota has doubled down on its status as a high-tax state, even as most states have gone in the opposite direction,” Walczak added. “That may go some way to explaining the state’s recent economic weakness: Employment grew just 0.7 percent in Minnesota last year, ranking 42nd in the nation. Net out-migration to other states is the sixth-highest out-migration for households earning $200,000 or more and the eighth-highest net income outflow from all households.”

Unlike Shapiro, it will be hard to argue that Walz is a moderate. Governor Walz’s first budget proposal was even criticized by Minneapolis Star Tribune editorial office, no bastion of conservative thought, as it is too wasteful. Star Tribune described Governor Walz’s first budget proposal as “too big,” noting that it would increase state spending “by more than $2 billion and taxes by at least $1.2 billion, significantly more if the state extends the health care services tax that expires at the end of 2019.”

With Tim Walz, Kamala Harris has chosen a vice presidential candidate who, like herself, comes from a Democratic state that is raising taxes and losing population. While the outmigration has been happening in California for years, it is a more recent phenomenon in Minnesota, overlapping Walz’s term. “Minnesota’s population growth has collapsed under Walz—as it has in the United States generally—but the crash here has been even worse,” writes Josh Phelan, an economist at the Center for the American Experiment, a Minnesota-based think tank.

“Looking at Census Bureau population data from 2010-2020 and 2020-2023, Minnesota’s population grew by 0.4% during the four years of the Walz administration (2019-2023), which is slightly below the overall U.S. growth rate of 0.5%,” Phelan adds. “But if we look at the four years prior (2015-2019), Minnesota’s population grew faster than the U.S. population overall, by 2.8% versus 2.4%.

Many pundits and political activists have criticized Kamala Harris’ decision to select Tim Walz as her vice presidential running mate. Putting aside the political calculations, many of which militate against the Minnesota governor’s choice, it could be argued that Walz is a better fit for Harris due to compelling political considerations. When it comes to the direction Harris has said she wants to take federal tax policy, Walz’s track record and public statements align more closely with Harris’ vision than Shapiro’s.

“Vice President and presumptive Democratic presidential nominee Kamala Harris has a history of favoring larger tax increases on businesses and individuals than President Biden,” note Erica York and Garrett Watson, economists at the Tax Foundation. “While both President Biden and Vice President Harris have targeted their proposed tax increases at businesses and high-income individuals, key differences between their tax ideas in the past reveal where Harris may take her tax agenda in the 2024 campaign.”

“Overall, the Tax Foundation estimates that the major tax increase proposals in the Biden-Harris fiscal year 2025 budget would reduce economic output by 1.6% and reduce employment by 666,000 jobs,” York and Watson added. “If Harris were to go further with tax increases, as she has supported in the past, the economic losses would be even greater.”

If Governor Shapiro is disappointed that he was not approved to be Harris’ vice presidential candidate, he can take some solace in the fact that he won’t have to spend the next three months explaining why he supports Kamala Harris’ proposal to raise the federal corporate tax rate to 35%, when he recently said “Wall Street Journal” editorial that raising the corporate tax rate “will put American companies in an uncompetitive situation.”