Kamala Harris’s Tax Proposals Examining Biden’s Unfinished Biz

As the Democratic presidential nominee, Vice President Kamala Harris’s tax proposals aiming to raise approximately $5 trillion in taxes over the next decade while cutting others by over $4 trillion. Her plan is a continuation of the Biden administration’s efforts, focusing on increasing taxes for corporations and affluent households while ensuring that most Americans see little to no change in their tax burdens.

Redistributing the Tax Burden A Return to 1986 Levels

Harris’s strategy would significantly impact high-income households, with top marginal tax rates reaching levels unseen since 1986. Wealthy investors and company founders would face substantial capital-gains taxes under her administration, introducing a new tax on unrealized gains for those with a net worth exceeding $100 million. This approach marks a sharp departure from current laws, where capital gains are not taxed until assets are sold.

Harris’s tax strategy could reshape wealth distribution, heavily taxing high-income households and unrealized gains, according to wsj news.

Corporate Tax Hikes A 28% Federal Rate

Corporations would see their tax rate rise to 28%, up from the current 21%, under Harris’s plan. Large companies would also face a 21% minimum tax, an increase from today’s 15%. These changes would broaden the tax base and push the U.S. closer to the upper end of global corporate tax rates. The RATE Coalition, representing companies like Target and Altria, warns that these hikes could lead to higher prices, lower wages, and fewer jobs.

Protecting the Middle Class No Tax Increases for Those Earning Under $400,000

Despite proposed tax increases for corporations and the wealthy, Harris has vowed to protect households earning under $400,000. She promises no tax hikes for these households. This effectively extends most of the expiring Trump tax cuts. Her commitment aligns closely with Biden’s approach. It could preserve much of the 2017 tax law, despite her initial opposition.

Expanding Tax Credits Relief for Families

Harris has proposed reviving and expanding several tax credits. These include the child tax credit and earned income tax credit. She aims to offer $3,000 per child for most children and $3,600 for those under age 6. A new tier would provide $6,000 for newborns. These measures are intended to offer significant relief to low- and middle-income families, reducing many parents’ taxes.

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Facing Challenges: Congressional Dynamics and Tax Negotiations

A potential Democratic sweep in 2024 could allow Harris to advance her fiscal agenda. However, internal party disagreements might challenge her efforts. Narrow congressional majorities could also pose significant obstacles. Even without full control of Congress, Harris would need to negotiate with Republicans in 2025. This is especially critical as key provisions of the 2017 tax law are set to expire.

The Republican Response Trump’s Counterproposal

Former President Donald Trump, the Republican nominee, proposes extending the expiring tax cuts. He plans to introduce additional cuts. These include a lower corporate tax rate and exemptions for tips and Social Security benefits. His running mate, Sen. JD Vance, suggested a larger child tax credit. Trump aims to impose tariffs to offset lost revenue, which could potentially raise consumer costs.

The Road Ahead Balancing Revenue and Policy Goals

Kamala Harris’s tax proposals represent a significant shift in U.S. tax policy, with a focus on increasing revenue from the wealthiest individuals and corporations. Balancing revenue needs with policy goals, amid expiring tax provisions and Congressional opposition, will determine the success of her fiscal agenda.

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