Reviewed by Lea D. Uradu
Fact checked by Vikki Velasquez

What Is a Tax Haven?

A tax haven is a country that offers individuals or businesses little or no tax liability. The Caribbean offers some of the most popular tax havens in the world, providing benefits such as very low tax liability and financial privacy. Among the most used Caribbean tax havens are the Bahamas, Panama, and the Cayman Islands.

Key Takeaways

• Most of the Caribbean nations boast tax security for business owners and individuals due mainly to their financial privacy laws and low tax implications.
• The only cost for most of these countries is an annual business license fee, with a 0% tax rate.
• It is advisable to work with a seasoned tax professional before setting up an offshore account or business.

Many of the economies of the Caribbean are what is sometimes known as pure tax havens, in that they impose no taxes at all. A number of Caribbean nations were motivated to become tax havens so they could reduce dependence on foreign countries and maintain their own economies.

The Cayman Islands

The Caymans provide services such as offshore banking, offshore trusts, and the incorporation of offshore companies.

Offshore companies are not taxed on income earned abroad, and there is no taxation of Cayman international business companies (IBCs). The islands have no income tax, no corporate tax, no estate or inheritance tax, and no gift tax or capital gains tax, making it a pure tax haven.

The Caymans have very strict banking laws designed to protect banking privacy. Offshore corporations in the Caymans are not required to submit financial reports to any Caymans government authority. Incorporation in the Caymans is a very simple, streamlined process.

There are no exchange controls in the Caymans restricting money transfers in any way. Offshore businesses are not required to pay stamp duty on asset transfers.

Panama

The Republic of Panama is considered a very secure pure tax haven. One noteworthy characteristic of Panama offshore jurisdiction law is that offshore companies are allowed to conduct business operations within and outside of the offshore jurisdiction. Offshore Panamanian companies and their owners are not subject to income taxes, corporate taxes, or local taxes, and people of any nationality may incorporate within Panama. Panama strictly protects the privacy of offshore trusts and foundations by law.

As a provider of offshore banking services, Panama has strict banking secrecy laws designed to protect the privacy of account holders. Panama has no exchange control laws.

The Bahamas

The Bahamas became widely popular as a tax haven in the 1990s after passing legislation that enabled the incorporation of offshore corporations and IBCs. It remains one of the preferred tax havens for residents of the United States and European countries. The Bahamas provides offshore banking, registration of offshore companies, registration of ships, and offshore trust management.

The Bahamas was the first Caribbean nation to adopt strict banking secrecy laws. Information on offshore bank account holders can only be disclosed by the specific order of the Bahamian Supreme Court. The Bahamas is a pure tax haven, with no tax liability at all for offshore companies or individual offshore bank account holders on income earned outside of the jurisdiction.

The British Virgin Islands

The British Virgin Islands (BVI) is an ideal place to establish an offshore bank account. The country does not impose any taxes on offshore accounts, and it has no tax treaties with other nations, thus protecting the financial privacy of bank account holders.

There are no taxes on offshore companies, and BVI IBCs pay no taxes on profits or capital gains generated from outside of the BVI.

An advantage to offshore banking customers and offshore companies incorporated in the BVI is that there are no exchange controls. This makes it much easier to transfer funds from one place to another for trading and investment purposes while protecting financial privacy.

$4 trillion

The amount of U.S. private wealth held in overseas accounts, according to data reported to the Internal Revenue Service (IRS). Nearly half of that total is in jurisdictions normally considered tax havens.

Dominica

The Commonwealth of Dominica has initiated legislation that facilitates the creation of offshore corporations, trusts, and foundations, providing tax-friendly and privacy-protected offshore banking services.

Dominica is a pure tax haven that imposes no income taxes, no corporate taxes, and no capital gains tax on income earned abroad. There are also no withholding taxes and no estate taxes, including inheritance taxes or gift taxes. Offshore companies and trusts do not have to pay any stamp duty on transfers of assets. People of any nationality may form offshore corporations in Dominica. The nation has privacy laws that shield the identities of owners and directors of offshore companies incorporated in Dominica.

There is no taxation of interest earned on offshore bank accounts, and information on offshore account holders is not shared with tax authorities of any other country. Dominica’s asset protection and financial privacy laws are very strict, making Dominica a secure offshore tax haven.

Nevis

Nevis, together with St. Kitts, forms the St. Kitts and Nevis Federation. Nevis offers tax-friendly formation of offshore limited liability companies (LLCs), trusts, and foundations, along with excellent offshore banking and insurance services.

Nevis provides financial privacy by not making public any information regarding owners and directors of offshore companies. Incorporation in Nevis requires only three directors and one shareholder, who can also be a director. A Nevis exempt trust is exempted from taxation on any income earned outside of Nevis, including dividends and interest. Nevis trusts do not have to pay stamp duty on transactions.

Nevis doesn’t impose any local taxes on income earned outside of the jurisdiction. Offshore companies and their owners do not have to pay withholding taxes, capital gains taxes, or estate taxes, and they are not subject to corporate taxes or local taxes on income generated outside of Nevis.

There are no exchange controls in Nevis, and the country has steadfastly refused to sign any taxation treaties with other countries.

Anguilla

Anguilla is a part of the Britain Overseas Territory, and it has become a respected tax haven. The offshore jurisdiction of Anguilla levies zero taxation on all income generated outside of the jurisdiction by offshore companies. Anguilla is a pure tax haven that does not impose income taxes, estate taxes, or capital gains taxes on individuals or corporations.

All offshore entities incorporated in Anguilla are exempt from paying stamp duty.

Anguilla financial legislation strictly protects the privacy of offshore bank accounts and business entities. The Offshore Banking Act of 2005 prohibits all bank employees or agents from disclosing any financial information without the express consent of the account holders. There are no exchange controls regarding monetary or asset transfers.

Costa Rica

Costa Rica, bordered by Nicaragua and Panama, is not considered a pure tax haven, but it is recognized as tax-friendly enough to have been referred to as the Switzerland of Central America. Through a number of tax incentives, the country has been extremely successful in attracting some of the world’s largest corporations.

Companies incorporated in Costa Rica are allowed to conduct business both within and outside of the jurisdiction. No local taxes are imposed on revenue generated by companies that do not conduct business in the jurisdiction. As a business incentive, Costa Rica grants eight-year exemptions from any taxation to many corporations. Corporate entities that are required to pay taxes pay extremely low rates and are generally exempt from taxes on interest, capital gains, or dividend income.

Costa Rica tightly protects the privacy of offshore banking. Money or other financial assets can be transferred in or out of Costa Rica without any limitation on the amount and without having to disclose the source of funds.

Belize

Belize offers offshore banking and the easy incorporation of offshore companies or the formation of trusts or foundations. Offshore businesses incorporated in Belize do not pay any taxes on income earned abroad. Belize-incorporated companies and trusts are exempt from paying stamp duty.

Offshore bank accounts are not taxed on earned interest, nor subject to repatriation or capital gains taxes. Banking legislation guarantees strict confidentiality for offshore banking. The names of account holders and any other financial information can only be disclosed by court order in relation to a criminal investigation.

While Belize does not have any exchange controls, it does have several tax treaties with foreign governments. The government of Belize is still strongly committed to protecting financial privacy.

Barbados

Barbados offers a thriving offshore financial sector providing offshore banking, incorporation of offshore corporations, and exempt insurance.

Barbados is not a pure tax haven, but it is a very low-tax environment for offshore corporations incorporated in Barbados. Taxes on profits of offshore companies are generally in the range of 0% to 5.5%, and the tax rate decreases as the profits earned increase. Offshore companies can import the necessary machinery or business equipment without paying any import duty.

There are no withholding taxes or capital gains taxes. Unlike most Caribbean tax havens, Barbados does have double taxation treaties with a number of other countries, including Canada and the U.S.

Are Tax Havens Illegal?

It is not inherently illegal to do business or hold bank accounts in a tax haven. However, the legality of a foreign national holding assets or doing business in a tax haven will depend on the laws of their home country, as well as international banking laws.

Which Countries Do Not Tax Their Citizens?

Bermuda, Monaco, the United Arab Emirates, and the Bahamas are some examples of countries that do not tax the income of their citizens. However, they do have other forms of taxation, such as import duties and tariffs.

Can You Avoid Taxes by Becoming a Foreign Citizen?

Some wealthy Americans have tried to avoid income taxes by renouncing their citizenship and becoming naturalized in another country with lower taxes. However, the process is expensive: in addition to the administrative fee of $2,350, you may also have to pay an “exit tax” to the Internal Revenue Service (IRS). This tax is equivalent to paying a capital gains tax on all of your assets on the day that you renounce your citizenship.

The Bottom Line

Tax havens are countries or territories with favorable tax policies and financial privacy laws that make them an attractive place for investment and business. These destinations have been somewhat dramatized in popular culture as convenient locations to move assets and avoid taxation.

Reviewed by Thomas J. Catalano
Fact checked by Jared Ecker

International trade is the purchase and sale of goods and services by companies in different countries. Consumer goods, raw materials, food, and machinery all are bought and sold in the international marketplace.

International trade allows countries to expand their markets and access goods and services that otherwise may not have been available domestically. As a result of international trade, the market is more competitive.

This can ultimately result in more competitive pricing and cheaper products. Some countries engage in national treatment of imported goods, treating them as equivalent to those same products produced domestically.

Key Takeaways

• International trade allows consumers and countries to be exposed to goods and services that are not available in their own countries, or that are more expensive domestically.
• The importance of international trade was recognized early on by political economists such as Adam Smith and David Ricardo.
• Critics argue that international trade can be harmful to smaller nations, putting them at a disadvantage on the world stage.

Understanding International Trade

If you can walk into a supermarket and find Costa Rican bananas, Brazilian coffee, and a bottle of South African wine, you’re experiencing the impacts of international trade.

International trade was key to the rise of the global economy. In the global economy, supply and demand—and thus prices—both impact and are impacted by global events.

Political change in Asia, for example, could increase the cost of labor. This could increase the manufacturing costs for an American sneaker company that is based in Malaysia, which would then increase the price charged for a pair of sneakers that an American consumer might purchase at their local mall.

Imports and Exports

A product that is sold to the global market is called an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in the current account section of a country’s balance of payments.

Different countries are endowed with different assets and natural resources, such as land, labor, capital, and technology. Global trade allows wealthy countries to use their resources more efficiently.

This also allows some countries to produce the same good more efficiently; in other words, more quickly and at a lower cost. Therefore, they may sell it more cheaply than other countries might. If a country cannot efficiently produce an item, it can obtain it by trading with another country that can. This is known as specialization.

Comparative Advantage

England and Portugal have historically been used—as far back as in Adam Smith’s “The Wealth of Nations”—to illustrate how two countries can mutually benefit by specializing and trading according to their own comparative advantages.

In such examples, Portugal is said to have plentiful vineyards and can make wine at a low cost, while England is able to manufacture cloth more cheaply given its pastures are full of sheep.

According to the theory of comparative advantage, each country would eventually recognize these facts and stop attempting to make the product that was more costly to generate domestically in favor of engaging in trade.

Indeed, over time, England would likely stop producing wine, and Portugal would stop manufacturing cloth. Both countries would realize that it was to their advantage to redirect their efforts at producing what they were relatively better at domestically and, instead, to trade with each other in order to acquire the other.

Important

According to international trade theory, even if a country has an absolute advantage over another, it can still benefit from specialization.

These two countries realized that they could produce more by focusing on those products for which they have a comparative advantage. In such a case, the Portuguese would begin to produce only wine, and the English, only cloth.

Each country could then create a specialized output of 20 units per year and trade equal proportions of both products. As such, each country could access both products at lower costs. We can see then that for both countries, the opportunity cost of producing both products is greater than the cost of specializing.

Comparative advantage can contrast with absolute advantage. Absolute advantage leads to unambiguous gains from specialization and trade only in cases wherein each producer has an absolute advantage in producing some good.

If a producer lacked any absolute advantage, then they would never export anything. But we do see that countries without any clear absolute advantage do gain from trade because they have a comparative advantage.

Origins of Comparative Advantage

The theory of comparative advantage has been attributed to the English political economist David Ricardo. Comparative advantage is discussed in Ricardo’s book “On the Principles of Political Economy and Taxation,” published in 1817, although it has been suggested that Ricardo’s mentor, James Mill, likely originated the analysis and slipped it into Ricardo’s book on the sly.

Comparative advantage, as we have shown above, famously showed how England and Portugal both benefit by specializing and trading according to their comparative advantages.

In this case, Portugal was able to make wine at a low cost, while England was able to cheaply manufacture cloth. Ricardo predicted that each country would eventually recognize these facts and stop attempting to make a product that was more costly to generate.

A more contemporary example of comparative advantage is China’s comparative advantage over the United States in the form of cheap labor. Throughout much of the 20th century, Chinese workers produced simple consumer goods at a much lower opportunity cost.

The comparative advantage for the U.S. is in specialized, capital-intensive labor. American workers produce sophisticated goods or investment opportunities at lower opportunity costs.

Specializing and trading along these lines benefit each country. However, it should be noted that Chinese manufacturers are now able to produce goods that span all levels of the value chain, including high-quality, higher-cost products.

The theory of comparative advantage helps to explain why protectionism has been traditionally unsuccessful. If a country removes itself from an international trade agreement, or if a government imposes tariffs, it may produce an immediate local benefit in the form of new jobs; however, this is rarely a long-term solution to a trade problem.

Eventually, that country will grow to be at a disadvantage relative to its neighbors, countries that were already better able to produce these items at a lower opportunity cost.

Note

The U.S. international trade deficit in November 2024 was $78.2 billion, meaning imports exceeded exports.

Criticisms of Comparative Advantage

Why doesn’t the world have open trading between countries? When there is free trade, why do some countries remain poor at the expense of others? There are many reasons, but the most influential is something that economists call rent-seeking. Rent-seeking occurs when one group organizes and lobbies the government to protect its interests.

Say, for example, the producers of American shoes understand and agree with the free-trade argument but also know that cheaper foreign shoes would negatively impact their narrow interests.

Even if laborers would be most productive by switching from making shoes to making computers, nobody in the shoe industry wants to lose their job or see profits decrease in the short run.

This desire could lead the shoemakers to lobby for special tax breaks for their products or extra duties (or even outright bans) on foreign footwear.

Appeals to save American jobs and preserve a time-honored American craft abound—even though, in the long run, American laborers would be relatively less productive and American consumers relatively poorer as a result of such protectionist tactics.

Other Possible Benefits of Trading Globally 

International trade not only results in increased efficiency but also allows countries to participate in a global economy, encouraging the opportunity for foreign direct investment (FDI). In theory, economies can thus grow more efficiently and become competitive economic participants more easily.

For the receiving government, FDI is a means by which foreign currency and expertise can enter the country. It raises employment levels and, theoretically, leads to growth in the gross domestic product (GDP). For the investor, FDI offers company expansion and growth, which means higher revenues.

Free Trade vs. Protectionism

As with all theories, there are opposing views. International trade has two contrasting views regarding the level of control placed on trade between countries.

Free Trade

Free trade is the simpler of the two theories. This approach is also sometimes referred to as laissez-faire economics. With a laissez-faire approach, there are no restrictions on trade.

The main idea is that supply and demand factors, operating on a global scale, will ensure that production happens efficiently. Therefore, nothing must be done to protect or promote trade and growth because market forces will do this automatically.

Protectionism

Protectionism holds that regulation of international trade is important to ensure that markets function properly. Advocates of this theory believe that market inefficiencies may hamper the benefits of international trade, and they aim to guide the market accordingly.

Protectionism exists in many different forms, but the most common are tariffs, subsidies, and quotas. These strategies attempt to correct any inefficiency in the international market.

As international trade opens up the opportunity for specialization, and thus more efficient use of resources, it has the potential to maximize a country’s capacity to produce and acquire goods.

Opponents of global free trade have argued, however, that international trade still allows for inefficiencies that leave developing nations compromised. What is certain is that the global economy is in a state of continual change. Thus, as it develops, so too must its participants.

What Are the Benefits of International Trade for a Business?

The benefits of international trade for a business are a larger potential customer base, meaning more profits and revenues, possibly less competition in a foreign market that hasn’t been accessed as yet, diversification, and possible benefits through foreign exchange rates.

What Creates the Need for International Trade?

International trade arises from the differences in certain areas of each nation. Typically, differences in technology, education, demand, government policies, labor laws, natural resources, wages, and financing opportunities spur international trade.

What Are Common Barriers to International Trade?

The barriers to international trade are policies that governments implement to prevent international trade and protect domestic markets. These include subsidies, tariffs, quotas, import and export licenses, and standardization.

The Bottom Line

The world economies have become more intertwined through globalization and international trade is a major part of most economies. It provides consumers with a variety of options and increases competition so that businesses must produce cost-efficient and high-quality goods, benefiting these consumers.

Nations also benefit through international trade, focusing on producing the goods they have a comparative advantage in. Though some countries limit international trade through tariffs and quotas to protect domestic businesses, international trade has been shown to benefit economies as a whole.

Fact checked by Stella Osoba

The average retirement account had returns of about 18% in 2023—we’re still waiting for data for 2024, but given stock and bond market returns, they should have been as strong or stronger—marking another robust year for many retirement savers.

But you don’t want to be left behind if your returns aren’t quite where you want them to be. Understanding how your 401(k) performs compared with others can help you gauge whether you’re on track for retirement.

Key Takeaways

• The average 401(k) return in 2023 was about 17.5% to 18%.
• Retirement account returns depend on the mix of assets you or your fund choices are invested in.
• Target-date funds are often the default option for 401(k) plans.

How 401(K)s Work

A 401(k) is a defined contribution retirement plan that lets employees save pre-tax dollars through automatic payroll deductions, often with matching employer contributions. With nearly $9 trillion collectively held by Americans 401(k)s, they are a cornerstone of private-sector retirement.

Most plans offer a range of investment options, including active mutual funds and index funds. Target-date funds are the most popular choice.

If you’re in target-date funds, you might have returns lower than average, especially as your fund becomes more conservative as you near retirement. That’s by design: they prioritize steadier, more predictable growth aligned with your retirement timeline over chasing maximum returns.

Average/Median 401(k) Balances

The average 401(k) balance in 2024 was $132,300, but the median balance (the midpoint of all accounts) was significantly lower at around $35,000. That means a relatively small number of very large accounts pull the average up considerably—nearly 30% of plan participants had balances under $10,000.

As you might expect, older workers closer to retirement are likelier to have larger account balances than younger cohorts since they’ve had more time in the workforce to accumulate savings. These patterns highlight how early and consistent saving can lead to strong long-term growth.

For perspective, long-term savers, particularly Gen-Xers who have stayed in their plans for 15-plus years, have much higher balances, averaging $586,100.

Disparities in 401(k)s Balances

Many disparities exist across demographic groups.

Men are somewhat more likely than women to own retirement accounts (47.8% vs 43.5%). Men also consistently have higher 401(k) account balances than women. These are the figures for 2023:

• Men: $157,489 (avg.)/ $42,263 (median)
• Women: $112,401 (avg.)/ $31,164

There are also significant differences by race and ethnicity. About 54% of whites and 46.8% of Asians own retirement accounts, compared with 37% of Blacks and just 28.3% of Latinos.

Advisor Insight

In 2024, the average total contribution rate to 401(k)s (including both employee and employer contributions) was 14.1% of one’s salary.

Average/Median 401(k) Returns

In recent years, 401(k) participants have seen strong returns because of positive performance in financial markets.

For 2023, the average total return for 401(k) plans administered by Vanguard was 18.1% (median, 19.2%), while the personal return (which accounts for contributions and withdrawals) was 17.6% (median, 18.9%). Looking at longer-term performance, over the five years ending in 2023, participants averaged 9.7% annually (median, 10.4%) with an 8.9% personal return (median, 9.2%).

Factors Impacting 401(k) Returns

Several factors influence 401(k) portfolio returns:

• Investment choices: Those in target-date funds generally had more consistent returns with less extreme shifts.
• Age affects risk tolerance: Younger participants typically had more in stocks, with those under 45 on average holding a portfolio made up of almost 90% in stocks.
• Trading activity: About 95% of participants didn’t change their accounts in 2023, maintaining their long-term investment strategy.

The Bottom Line

While comparing your balance and returns to averages can be useful, remember that retirement savings are highly personal and depend on factors like age, salary, and years until retirement. Focus on maintaining the contribution levels you can afford and ensuring your investment mix aligns with your retirement timeline.

Fact checked by Vikki Velasquez

Privatizing the United States Postal Service (USPS) has been a controversial topic for years, gaining attention during Donald Trump’s first presidency when he called it a “joke.” With Trump back in office, the topic has emerged again.

The USPS incurred a $9.5 billion loss in 2024, up from a $6.5 billion loss in 2023. This urged Trump to call for privatization, believing that these losses were unsustainable and that this financial inefficiency warranted an overhaul. The impact of privatization would be enormous.

However, privatizing the service could mean slower deliveries, higher shipping costs, and even fewer services in certain locations—all of which could impact how you get your next Amazon package and how much you pay for it.

Key Takeaways

• The United States Postal Service loses billions of dollars annually, which has prompted calls from President Trump to privatize the organization.
• Privatization could result in higher costs, slower deliveries, and reduced services, particularly in rural areas where affordable options are already limited.
• While Amazon relies on the USPS for its last-mile deliveries, it is expanding its own logistics network to reduce dependency.
• Transforming the USPS into a private entity may remedy its financial issues but risks undermining its role in providing affordable and equitable service nationwide.

USPS and Privatization

The USPS operates under a “universal service obligation,” which means it must serve every address in the country at consistent rates, even in remote areas. This ensures equal access to mail and package deliveries for all U.S. residents.

Without this mandate, private companies may prioritize profit over service, and customers could incur higher costs as shipping fees increase, especially for less accessible areas, such as rural locations.

According to economist Bryce Quillin, co-founder of It’s A Working Title, “Currently, USPS offers some of the most affordable shipping rates, with Priority Mail averaging just over $8 per package compared to private carriers like FedEx and UPS, whose rates can be as much as 40% higher for similar services.” 

Important

The USPS plays a vital role in delivering mail and packages across the nation, including to remote rural areas where private operators, such as FedEx and UPS, charge much more or don’t cover altogether. It has also become the “last-mile” delivery service for e-commerce companies, like Amazon.

The USPS employs over 635,000 workers, making it one of the largest employers in the country. Privatizing the USPS could lead to many job losses or reduced benefits for employees, which would have adverse economic effects across the country.

Decrease in Usage

The calls for overhauling the USPS, however, are not unfounded. Due to the advent of digital communication, online banking, and bill payments, traditional mail has become obsolete.

In 2000, the use of first-class mail was at a high of 103.5 billion pieces and dropped to 45.98 billion pieces by 2023. Cato Institute determined the per capita basis of the 2023 mail volume was 37% of the 2000s.

Amazon and USPS: The Last-Mile Connection

Customers and USPS employees may not be the only ones who see the adverse impact of a privatized U.S. postal system. The impact would be felt among e-commerce companies, such as Amazon.

For Amazon, the USPS has been a critical component of its delivery process. The USPS’s ability to reach every U.S. address at a flat rate has allowed Amazon to offer extremely cost-effective delivery options to its customers, particularly in rural areas.

If the USPS were privatized, this could mean increased expenses for Amazon, which a portion would most likely be passed onto you as the customer, as well as possible operational disruptions, delaying how quickly you receive your packages. Customers may also notice:

• Amazon’s discounted rates for bulk shipments could disappear
• Its two-day shipping standard may be affected
• Higher product prices or subscription fees

“A shift to privatized postal services may cause retailers to pass higher logistics costs onto consumers, potentially dampening demand and reducing profit margins in the short-run,” said Quillin.

Note

In 2023, the USPS had 31,123 locations, about 500 fewer than in 2015. However, the number of USPS retail customer visits dropped 28% during that time, indicating that some locations should be closed.

Amazon Insulates Itself

Amazon has taken steps to lessen the impact of a privatized USPS system. It’s possible the impact could be minimal as Amazon has been expanding its one- to two-day delivery capabilities to rural areas, and the USPS would handle fewer of those.

Amazon has been building out its logistics network in rural areas by using hyper-efficient warehouses, contracted drivers, and mom-and-pop shops. Because the company is seeing increased demand in remote areas, it seeks to increase its shipping and have more control over its deliveries.

Amazon also believes that offering faster delivery to rural customers will increase the rate at which customers in these areas purchase goods. This increased volume would offset the higher delivery costs through the fees Amazon charges its sellers.

By expanding its logistics network, Amazon is trying to deliver 90% of its packages. As of 2025, the company delivers about two-thirds of its own packages in the U.S. In 2023, the USPS delivered only 9% of Amazon’s packages and UPS handled approximately 8%.

Though Amazon can insulate itself from a privatized USPS, smaller retailers may feel more of the brunt. “Privatization could lead to price hikes as market forces replace USPS’s government-subsidized pricing model, disproportionately affecting small retailers that rely on cost-effective shipping to remain competitive,” said Quillin.

The Bottom Line

The debate on the privatization of the USPS raises many questions about the balance of efficiency, accessibility, and equality. While converting the USPS to a private entity could remedy many of its financial woes and streamline the entity, it risks impeding its role as a universal service provider.

For many Americans and e-commerce companies like Amazon, the impact could be significant, felt through higher costs and slower service. While companies like Amazon have the power to transform their businesses and mitigate the impact, smaller businesses and individuals don’t have such capabilities.

Fact checked by Vikki Velasquez

In January 2025, former President Joe Biden signed the Social Security Fairness Act into law. The new legislation terminated two rules that reduced Social Security benefits for millions of retirees. With the act’s passing, approximately 3 million public workers will now see increased Social Security benefits.

Key Takeaways

• The Social Security Fairness Act eliminated two policies that reduced Social Security benefits for millions of retirees.
• The new law affects around 3 million workers, including teachers, firefighters, and police officers, by ending the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
• Public workers will now receive the full Social Security benefits they’ve earned, improving their financial stability during retirement.

What Is the Social Security Fairness Act?

The Social Security Fairness Act significantly changes how Social Security benefits are calculated for certain public sector workers. The law eliminates two Social Security policies that reduced benefits for retirees with a public pension: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

WPO reduced your Social Security payout if you worked in a job that didn’t pay Social Security, such as teaching or public service, and later qualified for Social Security benefits. On the other hand, GPO cut spousal or survivor Social Security benefits for government employees who received a pension.

For example, let’s say you worked as a teacher in a public school, where your job didn’t pay into Social Security, and later in your career, you worked in a private-sector job that did. When you retired, WEP would have reduced the benefits you earned from your private-sector job. With the new law, however, you’ll receive the full Social Security benefits without penalties.

How the Act Impacts You

If your Social Security benefits have been or would have been reduced by WPO or GPO, the Social Security Fairness Act will help improve your finances. Current retirees will start receiving larger benefit checks, which will help with housing, groceries, and medical expenses.

For future retirees, the act provides more certainty. When calculating your retirement income, you no longer need to factor in WEP or GPO reductions. Public sector workers can retire with the comfort of knowing their full benefits will be available to them regardless of whether they receive a pension from their government job.

The law levels the playing field for workers, ensuring that all individuals receive the benefits they have worked hard to earn, without penalizing those who chose careers in public service.

The Bottom Line

The Social Security Fairness Act is a significant step toward equity for millions of public servants, ending decades of benefit reductions caused by outdated policies. Eliminating the Windfall Elimination Provision and the Government Pension Offset ensures that retirees can now fully access the retiree benefits they’ve earned.

This change brings financial relief to many current retirees and provides future retirees with greater certainty in their retirement planning, creating a more equitable system for all.

Here’s how much the super-rich are really worth

Reviewed by Margaret James
Fact checked by Suzanne Kvilhaug

Many people believe that being wealthy means having a nice house, a late-model car, and a summer cottage, but the kind of money possessed by the wealthiest 1% of the world’s households dwarfs that concept. This 1% segment of the population owns large portions of major corporations, multibillion-dollar investment funds, islands in the Caribbean, and even rocket ships that take them into outer space.

The average net worth of the richest 1% of the global population’s households has mushroomed in the last decades. It now towers above the net worth of the average citizen more than ever before.

Key Takeaways

• The minimum net worth of the top 1% of households is roughly $13.7 million.
• An individual would have to earn an average of $407,500 per year to join the top 1%. A household would need an income of $591,550.
• The median household income in the United States was $80,610 in 2023.
• The widening gaps in wealth and income stem from a variety of factors, including increasing dominance of public and private equity by the wealthiest and tax breaks.
• There are 2,781 billionaires in the world with a cumulative wealth valued at $14.2 trillion in 2024.

America’s Richest: A Demographic Breakdown

An individual would have to earn an annual average income of $407,500 per year to join the top 1%. A household would need a yearly income of $591,550.

Compare that to the median real earnings of all workers in the United States: $80,610 for households in 2023.

The wealthiest 1% are spread across many industries and come from many backgrounds. They include medical professionals, entrepreneurs, executives, and those who inherited their wealth.

The top 1% in the U.S. earned over 22% of the total adjusted gross income (AGI) in the U.S. and paid just over 40% of all federal income taxes, according to Internal Revenue Service (IRS) data.

Important

The number of billionaires counted in Forbes’ 38th annual list of the world’s billionaires was 2,781 in 2024. These individuals were worth more than $14.2 trillion combined in 2024.

The Widening Wealth Gap

The net worth of the top 1% of American households rose steadily through the second half of the 20th century and beyond, according to the Economic Policy Institute.

• The wealthiest 1% in the U.S. had net worths equal to about 125 times that of the average American household in 1962.
• Their net worths were about 225 times the net worth of the average household by 2009.
• The gap between the richest and the poorest in the U.S. more than doubled from 1989 to 2016.

The minimum net worth of the top 1% of households is roughly $13.7 million. The top 10% have a net worth of about $1.9 million and up.

160%

Percentage increase in wages received by the top 1% from 1979 to 2020, compared to 31% for those in the bottom 90%.

Middle-class Americans’ wealth virtually stopped growing somewhere around the turn of the 21st century. The median income for middle-class Americans rose at an average rate of 1.2% per year from 1970 to 2000. The rate slowed to 0.3% per year from 2000 to 2018.

The wealth of the top 1% continues to outpace that of the entire middle class. The top earners hold more wealth than the middle and upper-middle classes put together.

There are various reasons for the disparity, but one important factor is outsized stock ownership among the richest Americans. The 1% own more than 50% of the equity shares in both private and public companies. Much of their wealth comes from stock prices.

This can leave them vulnerable to declines in stock prices, but they may become even richer if they take some stock gains and reinvest the money in investments catering to rich investors, such as hedge funds and private equity ventures.

Underlying Causes of the Wealth Gap

Much of the growing disparity can be traced to the steady flow of tax breaks for income, gifts, and estate taxes. These can disproportionately advantage wealthy Americans.

The first $13.99 million of an estate is exempt from taxes as of 2025. That figure is up from $13.61 million in 2024. While the middle class benefits from this reduction in taxes, this rule predominantly helps the wealthy retain a much greater portion of their assets and pass that on to their heirs.

Note

The richest person in the world on Jan. 27, 2025, was Elon Musk of the United States, who had a net worth of $428 billion. The richest non-American was Bernard Arnault of France, with a net worth of $209 billion.

Criticism of the Top 1%

There has been a lot of criticism of the world’s ultra-rich, especially those living in the United States. They’ve been accused of hoarding their wealth, lobbying for tax breaks, and not contributing their fair share in taxes.

Many politicians want to impose more taxes on the wealthy. Sen. Elizabeth Warren (D-Mass.) proposed a tax on ultra-millionaires as part of her 2016 campaign to become the Democratic presidential candidate for the 2020 election. Sen. Bernie Sanders (I-Vt.), also a candidate, pushed for an estate tax hike so billionaire heirs would pay more in taxes. But ideas like this have failed to gain traction.

Then-President Joe Biden managed to get some measures through in his Inflation Reduction Act of 2022 that pursue new revenue sources from wealthy Americans. They include:

• Additional IRS funding to pursue unpaid taxes from those earning $400,000 or more
• A minimum corporate tax of 15%
• A 1% tax surcharge on stock buybacks to discourage excessive use of profits to reward shareholders and executives

How Much Income Is Necessary to Be in the Top 1%?

An individual would need an average income of $407,500 per year to join the top 1%. A household would need an average of $591,550.

What Is the Net Worth of the Top 1% of Americans?

The world’s top 1% is formed by the richest individuals. The top 1% of household net worth in the U.S. started at $13,666,778 in 2023.

What Percentage of the Population Has a Net Worth of $2 Million?

Roughly 10% of Americans have a net worth of $1.9 million or more. Compare that to the top 1% of the American population, which has a minimum net worth of almost $13.7 million per household.

The Bottom Line

Income disparity is inevitable in a capitalist society and a free-enterprise economy. However, the fact that the disparity seems to be increasing is a source of growing concern for many.

The share of the nation’s wealth in the U.S. held by the top 1% increased from 23% to nearly 32% from 1989 to 2018. The amount of wealth held by the 1% continues to grow.

Reviewed by Lea D. Uradu
Fact checked by Vikki Velasquez

Tax havens have been known to greatly reduce or even eliminate taxes that would have otherwise been due if not for their placement in offshore accounts. Studies suggest that U.S. taxpayers hold around $4 trillion in overseas accounts, about half of that in countries normally considered tax havens.

This article analyzes the top 10 tax havens in Europe. The continent is home to many tax havens that offer advantageous environments for capital gains taxes, income taxes, and corporate taxes. These regions have attracted large companies along with wealthy private investors who seek refuge from taxation policies in their home countries.

Key Takeaways

• Europe is home to many tax havens that provide favorable environments for taxation on capital gains, income, and corporations.
• England, Germany, and Ireland are among the top tax havens on the continent.
• Switzerland’s financial secrecy has made it one of the world’s top places to store cash.
• Foreign companies can get favorable treatment as Danish holding companies while Luxembourg doesn’t charge capital gains taxes on certain stocks.

1. England

England is considered the epicenter of the world’s tax haven systems. Foundations and trusts are typical tax haven vehicles foreigners use to offer a protective tax-free or tax-reduced wrapper around assets. The country is particularly popular with foreign billionaires who benefit from a lack of income or capital gains taxes on investments held outside of the country.

London is Europe’s tax haven capital for non-British individuals. The city’s well-established banking systems are trusted and used by foreigners from nearly every country in the world. Small and large companies benefited from a relatively low 19% corporate tax up to 2022. That rate increased to 25% in 2023.

British territories are also popular tax havens, including the British Virgin Islands and the Cayman Islands. Neither overseas territory charges corporate taxes or capital gains taxes. Individuals aren’t taxed in the British Virgin Islands unless they are employed in the territory while the Cayman Islands don’t charge any individual income taxes. Neither territory has a withholding tax.

2. Germany

Foreign investors are freed from the burden of taxes on interest in Germany. The country retains the privacy of account holders. For non-resident corporations, foreign income is exempt from taxation whether it is in the form of dividends from foreign subsidiaries or income earned in foreign branches.

Corporations benefit from Germany’s tax environment as only 5% of dividends and capital gains have taxes levied against them. These classes of income are considered nondeductible operating expenditures according to German accounting standards.

3. Ireland

People who claim to live in Ireland but are not residents and hold a residence elsewhere are able to use its attractive tax environment. Ireland has a long history of offering low corporate tax rates to encourage foreign companies to relocate business on paper rather than physically.

Ireland is host to a business tax rate of 12.5%, and artists enjoy a tax-free income. The country has been host to quite a few shadow corporations attempting to take advantage of the low-tax environment.

Dublin is home to the International Financial Services Centre, a financial center that has served as a deregulated haven for both individuals and businesses. The IFSC has attracted the presence of 20 of the world’s top 25 financial services companies, as well as 17 of the top 20 global banking institutions.

4. Jersey

Jersey receives funds from England as a mainstay in England’s tax haven system. The crown dependency of Jersey operates under different financial transparency laws than most banking systems. It is notorious for banking secrecy procedures, as well as general secrecy in matters of government and justice.

The government charges no corporate taxes to foreign and domestic companies that are permanently established on the island. Financial companies are charged a flat 10% corporate tax rate while large corporate retailers and utility companies pay 20%. Jersey does not tax dividends or capital gains.

5. The Netherlands

Business taxes in the Netherlands are very low, as are taxes on interest and dividends. The Netherlands attracted $2.68 trillion of foreign direct investment stock in 2023.

The Netherlands has become a popular destination for international capital. The Netherlands has boomed in corporate headquarters and subsidiaries for its treatment of multinational taxes.

Tax exemptions, which are called participation exemptions, remove the tax burdens from dividends and capital gains that are accrued outside of the country. Royalties and interest payments are also free from tax burdens, though the Netherlands began withholding tax for entities established in low-tax jurisdictions beginning in 2021.

6. Switzerland

Once a home for many anonymous banks that are no longer able to operate anonymously, Switzerland still serves as a popular tax haven, as the country adheres to secrecy in banking practices.

The efforts of U.S. tax evasion investigators have not bumped Switzerland from the list of popular European tax havens. Russia has also identified Switzerland as an offshore jurisdiction that refuses to share banking information on account holders.

The Financial Secrecy Index ranked Switzerland as the second most secretive tax haven in the world based on its banking secrecy procedures and the amount of its offshore business. The country has a long history in this area, as it was the go-to hiding place for the upper class during the French Revolution.

Important

In 2018, Switzerland agreed to provide information about bank accounts with members of the European Union (EU) and nine other countries: Australia, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway, and South Korea.

7. Sweden

Sweden disposed of a number of taxes, including inheritance taxes and gift taxes. In 2012, Sweden began offering an investment savings account, or ISK, which can hold securities and funds with special tax rules.

Rather than being taxed on actual income, gains, and losses, it imposes a standard revenue tax on estimated earnings. This means you pay taxes even if your account drops in value. However, you can also withdraw funds at any time tax-free.

Though Sweden has not traditionally been viewed as a tax haven in Europe, changes to its tax codes and the introduction of new investment vehicles have modified the country’s image as a potential tax haven for foreign investors.

8. Denmark

Tax havens in Denmark are able to operate due to low transparency in information exchanges between tax authorities and banks. The real owner of a corporation or a foundation can be difficult to distinguish in Denmark, as is the case with limited partnerships.

As of 1999, Danish federal law was established to allow foreign entities to use the country as a jurisdiction for holding companies. Foreigners are allowed to hold 100% of shares in a Danish holding company and aren’t subject to corporate taxes in this case.

Other benefits of these companies include:

• Lack of restrictions for business activities
• Ease of registration
• Low requirement for minimum capital

9. Austria

Account holders in Austria are granted privacy in exchange for their funds, and Austrian bank accounts are popular with Germans. Austria’s bond market is popular with foreign investors. Stringent banking secrecy earned the country a ranking of 44 on the Financial Secrecy Index.

10. Luxembourg

German banks notoriously take advantage of Luxembourg’s tax environment as the dividends of many companies are not taxed. Long-term capital gains on stocks are tax-exempt if a majority share is 10% or more is not held. By placing segments of business entities in Luxembourg, foreign corporations have been able to cut huge tax bills from their expenses.

Luxembourg has become so notable for its tax laws that much of the country’s attractiveness for outside businesses are owed exclusively to these features, and Luxembourg’s economy is partially built around the business gained from its tax structure.

The country may be put at risk financially if it is no longer attractive to outside businesses for these reasons. European policymakers have demanded the country alter its tax structure to encourage corporate and consumer tax revenue.

What Is a Tax Haven?

Countries that offer corporations and individuals little to no tax liabilities are called tax havens. Many tax havens provide favorable tax benefits, including low or no tax rates for corporate and investment income. Some of these jurisdictions do not require residency and may promise not to share information with the home country. Although they are often associated with illegal activity, tax havens can be used as a legal way to minimize an individual or corporation’s tax liability.

Why Do Taxpayers Put Their Money into Offshore Tax Havens?

Individuals and corporations often use offshore tax havens to minimize their tax liabilities. These jurisdictions may promise low or no tax rates on corporate, personal, and investment income, while some even promise to shield information from being shared with the home country.

Is It Illegal to Use Tax Havens?

Contrary to what many people may believe, the use of tax havens isn’t always illegal. For the most part, it is a legal strategy that many wealthy people and corporations use to minimize their tax liability. But it can be illegal if money is purposely hidden from tax authorities in a taxpayer’s home country.

The Bottom Line

Some of the most popular tax havens are found in Europe. These areas may provide favorable corporate tax rates, little to no taxes on dividends and capital gains, and even secrecy.

Detailing the key components and potential impact of her economic plan and what it could’ve meant for the future

Fact checked by Vikki Velasquez
Reviewed by Samantha Silberstein

Former presidential candidate Kamala Harris’s economic plan included policies aimed at lowering the cost of living for middle- and working-class families, creating opportunities for economic growth in underserved communities, supporting social service programs, and more. However, while Harris’s plans overlaped with aspects of Bidenomics, there were also key differences.

Key Takeaways

• Kamala Harris’s economic plan included revising the tax code, lowering the cost of living, and addressing income inequality.
• Harris’s economic plan aimed to support middle—and working-class families, focus on job creation, and increase economic growth overall.
• The former presidential candidate originally faced criticism for a lack of clarity around her specific plans.

Key Components of Kamala Harris’s Economic Plan

The Harris-Walz campaign said it’s focus is “building up the middle class.” Harris said she would cut taxes, lower costs for everyday items, create jobs, and grow the economy. She has also said “I am a capitalist. I believe in free and fair markets.”

Cost of Housing

Lowering the cost of housing—an issue that is top of mind for many Americans as home prices reach a record high—was a key component of the Kamala Harris plan.

Her campaign called for the construction of 3 million new housing units to ease the housing supply shortage across the country. The former presidential candidate also planned to implement a tax incentive for homebuilders who build starter homes that are sold to first-time homebuyers and to propose a new $40 billion innovation fund to support local governments in finding solutions to housing shortages. Her agenda mentioned taking action to make certain federal lands eligible to be repurposed for affordable housing.

Harris said she would provide $25,000 in downpayment support for all eligible first-time homeowners while ensuring full participation by first-generation home buyers and a $10,000 tax credit for first-time home buyers.

The Harris-Walz administration said it would have called on Congress to pass two bills related to renting. The first is the Stop Predatory Investing Act, a bill introduced in 2023, which would have removed tax benefits for investors owning 50 or more single-family homes to rent, and the second is the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, a bill introduced in 2024 to crack down on companies inflating rental prices.

Harris’s plan also included lowering the cost of prescription drugs and the burden of medical debt. The former presidential candidate said she would do this by capping the cost of insulin at $35 and out-of-pocket expenses for prescription drugs at $2,000. She also said she would allow Medicare to speed up negotiations so drug prices can come down faster and to work to stop pharmaceutical companies from blocking competition. Building on her work as vice president, the candidate said she would have worked with states to cancel medical debt for millions of people.

Harris also proposed a ban on price gouging from grocery chains and an end to taxes on tips.

Note

The Harris-Walz campaign relesed its policy website “A New Way Forward” in September 2024.

Investments in Community Development Financial Institutions (CDFIs)

During her vice presidency, Harris supported providing access to capital in underserved communities. In 2022, she formed the Economic Opportunity Coalition (EOC) to help minority, rural, and low-income communities develop small businesses. The move was an expansion of Harris’s support of community development financial institutions (CDFIs), institutions that provide funds to support economic growth in rural and low-income parts of the country.

In April 2023, Harris and the U.S. Treasury Department announced that the fund had awarded more than $1.73 billion in grants to CDFIs.

At the 2024 Freedman’s Bank Summer Symposium, the Biden-Harris administration announced that the EOC had plans to commit $3 billion in corporate deposits to CDFIs by 2025. The administration also highlighted that the Emergency Capital Investment Program (ECIP)—a program that the vice president helped pass when she was a senator to support financial institutions in lending to underserved communities—had invested $8.57 billion into community financial institutions to support small businesses and consumers who were negatively impacted by the COVID-19 pandemic.

Impact on Middle- and Working-Class Families

Harris’s proposals to lower the cost of living—including her plans to decrease housing and grocery prices—aimed at helping the middle and working class.

“Costs are still too high. And on a deeper level, for too many people, no matter how much they work, it feels so hard to just be able to get ahead,” the candidate said in a speech delivered on the campaign trail in North Carolina in August. “As president, I will be laser-focused on creating opportunities for the middle class that advance their economic security, stability and dignity.”

Harris proposed more tax relief, including an expansion of the Child Tax Credit that would provide a $6,000 tax cut to families with newborn children and restoring the American Rescue Plan’s expanded Child Tax Credit of up to $3,600 per child tax credit for middle-class and working families.

The Harris-Walz administration said it would also expand the Earned Income Tax Credit, which would have helped workers with low and moderate incomes by reducing their tax burden. Harris’s plan includes cutting taxes to make health insurance on the Affordable Care Act Marketplace.

Job Creation and Economic Growth

Job creation and economic growth have been in the spotlight recently following years of high inflation, interest rate hikes, and continuous concern about a potential recession.

Note

At the Democratic National Convention in Chicago in August 2024, Harris talked about creating an “opportunity economy” in which everyone has the chance to compete and succeed.

“As president, I will bring together labor and workers and small business owners and entrepreneurs and American companies to create jobs, to grow our economy and to lower the cost of everyday needs,” Harris said.

Harris proposed a $50,000 tax deduction for new small businesses, which would have been above the $5,000 break currently offered at the start of 2025. Her campaign set a goal of encouraging 25 million new small business applications in the first two years of her potential presidential term.

Many of her proposals regarding economic growth revolve around her plans to lower the cost of housing, groceries, and other essentials and provide access to capital to small business owners. Her plans for these proposals were more detailed than her proposals for job creation.

Addressing Income Inequality

Harris’s economic plan included proposals aimed at bringing down costs for lower-income Americans and cracking down on what she calls predatory practices by large corporations and investors. Her proposed ban on price gouging, for example, would have made groceries more affordable for everyday Americans while curbing profits for retail giants.

The 2024 democratic candidate says in her first 100 days in office as president she would have encouraged Congress to pass a national ban on price gouging for food, given the Federal Trade Commission and prosecutors authority to pursue “bad actors” who violate that order, and examined big grocery chain mergers.

Her proposals around housing affordability included lowering rental costs and discouraging real estate investors from buying up and renting out single-family homes by cutting their tax incentives.

The vice president’s proposed “opportunity economy” focuses on economic fairness: She has said that part of this plan would be ensuring every American has economic security. Her push for providing financing for underserved communities would have, theoretically, helped break down income inequality, since it would have enabled more people in rural and low-income communities to start businesses.

In a continuation of the work of the Biden-Harris administration, the candidate has also pushed for the protection of social safety programs, including Social Security and Medicare.

Criticisms and Challenges

One of Harris’s challenges was outlining a clear vision for the future that both builds on Biden’s presidency but isn’t solely defined by it. Harris also faced some criticism that her background as a prosecutor has made it difficult for her to hone that vision.

Important

Prior to becoming a senator, Kamala Harris was attorney general of California.

Harris also garnered pushback for her proposal to ban price gouging at the grocery store. Economist Carl Schramm, a professor at Syracuse, characterized such a proposal as “price controls,” Investopedia previously reported. “The real issue with price controls is who you drive out in the market,” he said. “If you put price controls on housing, no investor is going to build houses to rent.”

Harris, like her rival Trump, proposed ending income taxes on tips—a move some economists say would reach a very small percentage of the workforce and lowest paid, and could encourage other professions to replace wages with tips.

Background of Kamala Harris’s Economic Priorities

Before Kamala Harris was vice president, she was as a senator from California. In 2018, Harris introduced the LIFT (Livable Incomes for Families Today) the Middle Class Act, which would have created a $3,000 per year tax credit for individuals and $6,000 for married couples, benefitting lower-income earners via the tax code.

During her 2020 presidential run, Harris said that if she became president, she would repeal the Tax Cuts and Jobs Act (TCJA) passed by Donald Trump that implemented broad tax cuts for both high-income individuals and corporations.

As vice president, Harris supported Biden in his attempts to reinvigorate the economy following the COVID-19 pandemic. The American Rescue Plan, which passed in March of 2021, included $1,400 stimulus checks and extended unemployment benefits. The administration also fought to protect and expand on the Affordable Care Act, empowering Medicare to debate drug prices and making health care plans more affordable.

The Biden-Harris administration forgave up to $20,000 in student loan debt for borrowers whose income is less than $125,000 and who were Pell Grant recipients and up to $10,000 for those who were not Pell Grant recipients. It attempted to forgive more than $430 billion in student loan debts in 2023 and implement an income-driven repayment plan called Saving on a Valuable Education (SAVE) Plan, though both attempts were blocked.

Biden and Harris also passed the CHIPS and Science Act, which invested in domestic semiconductor manufacturing and research, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act.

Warning

Harris previously proposed a Medicare For All plan funded through taxes on financial transactions, including a 0.2% tax on stock trades and a 0.1% tax on bond trades. But in August 2024, a campaign official said Medicare for All is no longer on Harris’s agenda.

What Did Kamala Harris Accomplish as Vice President?

As vice president, Harris launched Central America Forward (CAF) to invest northern Central America and create jobs to slow migration. In March of 2024, she announced CAF had generated more than $5.2 billion since May 2021. She has also been active in protecting voting rights, reproductive freedom, and maternal health, and oversees the White House’s first-ever Office of Gun Violence Protection.

What Would be Kamala Harris’s Priority if She Was Elected?

Harris’s top priorities included lowering the costs of living for everyday Americans, cracking down on corporations that are increasing those costs, and creating economic opportunities in underserved communities. Many aspects of her plan included expansions of the work she and Biden have overseen during their administration.

How Did Trump and Harris Compare on Economic Policy?

During his first term as president, Donald Trump’s economic policies were mainly characterized by tax cuts, trade wars and tariffs, deregulation, and restrictions on immigration. The TCJA—which includes many reforms that expire in 2025—lowered taxes for both individuals and corporations, while his tariffs and trade war with China are also among the best-known aspects of his policy.

How Would Kamala Harris’s Agenda Differ From Biden’s if Elected?

Harris’s call to repeal the TCJA differs from what Biden has said about the act. Instead of calling for a complete repeal, Biden has said that he would extend tax breaks past their expiration in 2025, but only for those earning under $400,000. Overall, many of Harris’s economic proposals didn’t look starkly different from Biden’s.

What’s Kamala Harris’s Position on on Student Loan Debt and Medical Debt Forgiveness?

Student debt forgiveness has been a top priority of the Biden-Harris administration. In April 2024, Biden forgave $7.4 billion for 277,000 borrowers and $1.2 billion for 35,000 additional borrowers in July 2024. Harris is expected to continue this trend should she become president.

In June 2024, the vice president announced a new proposal alongside the Consumer Financial Protection Bureau (CFPB) that would eliminate medical debt from 15 million Americans’ credit reports. Her economic plan also includes canceling medical debts for millions of people.

The Bottom Line

Amid the 2024 presidential campaign, Harris’s positions included lowering the cost of living with proposals like a ban on price gouging at the grocery store and removal of tax benefits for investors renting many single-family homes. The candidate also planned to provide $25,000 in downpayment support for first-time homeowners and work to increase the housing supply. She proposed ending taxes on tips, and furthering her accomplishments as vice president by lowering the cost for prescription drugs and the burden of medical debt and expanding the Child Tax Credit.

The Minnesota governor was also previously Harris’ Vice President nominee in 2024

Fact checked by Vikki Velasquez
Reviewed by Samantha Silberstein

Tim Walz is the current governor of Minnesota and earlier served six terms in the U.S. House of Representatives. His history spans various roles and achievements in both state and national politics, highlighting a career centered around public service. Walz was named as Kamala Harris‘s vice presidential running mate for the 2024 election on Aug. 6, 2024, though Harris and Walz lost the 2024 election to Donald Trump.

Key Takeaways

• Tim Walz is currently the governor of Minnesota, serving in that role since 2018.
• Previously he was elected to six terms as a member of the U.S. House of Representatives from Minnesota.
• Tim Walz was named as Kamala Harris’s running mate on the 2024 Democratic presidential ticket on Aug. 6, 2024.
• Before entering politics, Walz spent several decades as a high school teacher in Nebraska and Minnesota.
• He also served in the Army National Guard, retiring after 24 years with the rank of command sergeant major, which made him the highest ranking enlisted officer ever to serve in Congress.

Early Life and Education

Tim Walz was born on April 6, 1964 in rural West Point, Nebraska. His official biography from his time in Congress describes his parents as “a public school administrator and community activist.”

Walz enlisted in the Army National Guard at age 17 and would go on to serve for 24 years, retiring in 2005 with the rank of command sergeant major. Again according to his Congressional biography, that made him “the highest ranking enlisted officer ever to serve in Congress.”

Walz graduated from Chadron State College in Chadron, Nebraska, in 1989, with a B.S. in social science education. He followed that with a year of teaching high school in China before returning to the U.S. for a high school teaching job in Nebraska.

After his 1994 marriage to Gwen Whipple, a fellow teacher, he moved with her to her native state of Minnesota, where they both took teaching posts at Mankato West High School, southwest of Minneapolis. Walz also helped coach the school’s state championship-winning football team and earned a master’s degree in educational leadership from Minnesota State University in Mankato.

As The New York Times wryly put it in an article about his selection for the Harris ticket, “He reminds you of your high school history teacher for a reason.”

Note

Had the Harris/Walz ticket won in November 2024, Tim Walz would have become the third Minnesotan vice president of the United States, after Hubert Humphrey and Walter Mondale, both also Democrats.

Political Career

After his retirement from the military, Walz ran for a U.S. House seat representing Minnesota’s First Congressional District. After winning that election in 2006, he was re-elected for another five terms. During his time in Congress, Walz served on both the House Armed Services Committee and the House Committee on Veterans’ Affairs.

In 2018, he ran in a statewide election, becoming Minnesota’s 41^st governor. He was re-elected to a second term in 2022.

In July 2024, after Kamala Harris replaced Joe Biden at the top of the Democratic ticket, Walz became part of a short list of mostly state governors and U.S. senators under consideration for the vice presidential slot. Announcing her selection of Walz, candidate Harris hit all the highlights of his resume: “As a governor, a coach, a teacher, and a veteran, he’s delivered for working families like his.” In November 2024, Walz campaign for Vice President fell short, as the Trump/Vance ticket prevailed.

Governorship

During his years as Minnesota governor, Walz championed legislation on a number of key issues.

As the Star Tribune in Minneapolis noted, “Walz was handily re-elected to a second term alongside narrow Democratic majorities in the Legislature. Using a $17.5 billion budget surplus, they spent billions of dollars on schools, infrastructure and other programs while passing a long list of progressive priorities such as marijuana legalization, universal school meals, paid family and medical leave, and abortion rights protections.”

His official bio on the state website says that, “Accomplishments from his time as Governor include providing universal free school meals for students, protecting reproductive freedom, strengthening voting rights, laying the groundwork to get Minnesota to 100% clean electricity by 2040, cutting taxes for the middle class, and expanding paid leave for Minnesota workers.”

Walz has made a particular issue of child poverty. Along with what his office called “the largest tax cut in state history,” Minnesota’s 2023 budget included “a nation-leading Child Tax Credit, which provides up to $1,750 per child for lower income families, [and] is expected to cut child poverty by 33%.”

What Is Tim Walz’s Current Role?

Tim Walz is currently serving his second term as the governor of Minnesota. He was elected in 2018 and re-elected in 2022.

What Positions Did Tim Walz Hold Before Becoming Governor?

Walz began his career as a high school teacher before making the transition into politics, first becoming a member of the U.S. House of Representatives and then his state’s governor. He also spent more than two decades in the Army National Guard from Nebraska and Minnesota.

How Long Did Tim Walz Serve in Congress?

Walz was elected to six consecutive two-year terms from his Minnesota House district, starting in 2006.

The Bottom Line

Once a relatively obscure figure on the national stage, Tim Walz emerged into the spotlight as a contender for—and ultimately the grand prize winner of—a coveted slot on the Democratic ticket. His bid for Vice President fell short in 2024, though Walz boasts a several-decade long career in politics.

How a San Francisco prosecutor became a vice president

Reviewed by Robert C. Kelly

Kamala Harris achieved the historic milestone of becoming the first woman and woman of color to serve as the vice president of the United States. Her career includes roles as an attorney general and U.S. senator.

Key Takeaways

• Kamala Harris served as vice president under President Joe Biden from 2021-2025.
• Kamala Harris made history as the first woman to serve as vice president of the United States.
• She served as both district attorney for San Francisco and as attorney general for the state of California.

Early Life and Education

Kamala Devi Harris was born in Oakland, California on Oct. 20, 1964. Her mother, Shyamala, emigrated from India, became a renowned breast cancer researcher, and received her doctorate the same year Kamala was born. Her father, Donald, came to the U.S. from Jamaica and was an economics professor at Stanford University.

Harris’s parents were active in the civil rights movement. Kamala participated in civil rights marches, even attending as a toddler. Her parents divorced when she was seven. She moved to Montreal at age 12 with her mother and her sister, Maya. Kamala and her sister reportedly organized a successful protest against the owner of their apartment building who wouldn’t let children play on the building’s lawn.

After graduation from Westmount High School in Quebec, Harris returned to the U.S. and entered Howard University in Washington, D.C., where she earned a B.A. in political science and economics. She returned to California and attended the University of California Hastings College of the Law where she earned her J.D. in 1989.

Important

President Joe Biden endorsed Kamala Harris as a candidate for the 2024 Presidential Election after he dropped out of the race.

Notable Accomplishments

Harris began her career as deputy district attorney in Alameda County, California, focusing on sex crimes. She became managing attorney of the Career Criminal Unit in San Francisco, and then chief of the San Francisco Community and Neighborhood Division of the DA’s office in 2000. She established California’s first Bureau of Children’s Justice. As the district attorney of San Francisco in 2004, Kamala Harris presided over the first same-sex wedding following the overturning of Proposition 8.

Harris created an environmental justice unit and launched a program called “Back on Track,” giving educational and employment opportunities to first-time drug offenders. In 2010, Kamala Harris was elected attorney general of California. She secured an $18 billion settlement for homeowners facing foreclosure and a $1.1 billion settlement for students and veterans deceived by a for-profit education company.

In 2021, Kamala Harris became Vice President of the United States as the first woman, woman of color, and South Asian American to assume this role. Harris traveled to more than 19 countries and met with over 150 world leaders to enhance global partnerships and alliances. Harris helped President Biden pass the Inflation Reduction Act in 2022 which cut family expenses, addressed the climate crisis, reduced the budget deficit, and ensured major corporations pay their share of taxes. It also enabled Medicare to negotiate prices for certain high-cost medications.

California Attorney

Harris defeated her former boss, Terence Hallinan, to become San Francisco district attorney in 2003. The conviction rate in San Francisco jumped from 52% to 67% during her first three years. Her “Back on Track” initiative cut recidivism for low-level offenders. During her tenure, Harris was shunned by police unions after she refused to seek the death penalty for a gang member convicted of killing police officer Isaac Espinoza.

In 2021, Harris became the first woman and Black and South Asian American attorney general of California. She is remembered for withdrawing from settlement negotiations with five of the country’s largest financial institutions for improper mortgage practices, eventually settling for five times the proposed amount.

Harris created Open Justice, an online platform that makes criminal justice data available to the public. The database has helped improve police accountability by tabulating the number of deaths and injuries of those in police custody. She also presided over the creation of “Operation Boo,” a mandatory curfew for all homeless sex offenders on Halloween.

U.S. Senator

Harris became the first South Asian American to enter the U.S. Senate in 2016. The left praised her pointed questioning of high-profile witnesses U.S. Attorney General Jeff Sessions and Supreme Court nominee Brett Kavanaugh. Representing California, Harris supported a single-payer healthcare system in the Senate and introduced legislation to provide financial relief to those facing rising housing costs.

Harris joined bipartisan bills less often than all other Senate Democrats, according to GovTrack. Of the 696 bills she co-sponsored, only 14% were introduced by Republicans. On the other hand, she received bicameral (House and Senate) support on more bills than any other member of her Senate class and had the most co-sponsors on her bills of anyone in her class.

Two Presidential Campaigns

Kamala Harris first sought the presidency in 2019. During the campaign, Harris confronted Joe Biden over his opposition to cross-district busing in the 1970s. She delivered a stirring anecdote about the opportunity that busing afforded one child, ending with the dramatic line, “And that little girl was me.” Harris abandoned her campaign in December 2019 and endorsed Joe Biden in March 2020.

Biden chose Harris as his running mate in August 2020, saying, “Back when Kamala was attorney general, she worked closely with (my son) Beau. I watched as they took on the big banks, lifted up working people, and protected women and kids from abuse. I was proud then, and I’m proud now to have her as my partner in this campaign.”Biden served as the 46th President of the U.S. with Harris as his vice president.

When President Biden declined to run for a second term in 2024, Harris said, “I am honored to have the President’s endorsement and my intention is to earn and win this nomination.” However, on Nov. 6, 2024, Donald Trump defeated Kamala Harris.

Philosophies and Publications

Harris published “Smart on Crime: A Career Prosecutor’s Plan to Make Us Safer” in 2009. It explores her philosophy and ideas for criminal justice reform. It portrays Harris as a prosecutor with a tough but empathetic approach.“The Truths We Hold: An American Journey” is Harris’ memoir and “Superheroes Are Everywhere” is a picture book autobiography for children.

Harris is generally considered to be in the moderate wing of the Democratic Party based on her Senate voting. Vice President Harris supported Medicare for All which differed from President Joe Biden. Harris was a co-sponsor of the Green New Deal. As vice president, she favored a path to citizenship for undocumented immigrants living in the U.S. Both favored the protection of Dreamers, including a plan to fix Deferred Action for Childhood Arrivals (DACA).

Did Kamala Harris Help Pass Legislation as a Senator?

Harris introduced a bill that became law in 2019: S. 129 (116th): Saint Francis Dam Disaster National Memorial Act. It provides for the establishment of a national monument to commemorate those killed by the collapse of the Saint Francis Dam on March 12, 1928. Three other bills that she sponsored include S. 3055 (115th): Disaster Victims Passport and ID Relief Act of 2018, S. 3033 (115th): COUNT Victims Act, and S. 729 (115th): John Muir National Historic Site Expansion Act

Who Is Kamala Harris’ Spouse?

Kamala Harris married Douglas Emhoff in 2014. An entertainment and intellectual property lawyer and litigator, he left his law firm after the 2020 presidential campaign to teach at Georgetown University and take up his duties as second gentleman.

Where Was Kamala Harris Born and Raised?

Kamala Harris was born in Oakland, California, and spent her early years in Berkeley, California, and her teenage years in Montreal, Canada, before returning to the U.S. to attend Howard University.

The Bottom Line

Kamala Harris is regarded as the first woman, and the first Black woman, the first South Asian-American elected to hold various government offices and positions, including state attorney general and U.S. senator. Harris served as Vice President of the United States under President Joe Biden.