Kamala Harris' Tax Plans: What We'll Have to Pay If She Wins

As the Democratic presidential candidate for 2024, Kamala Harris has taken on President Biden's tax policy and budget proposals. But she's also added some of her own. Harris gave a speech in North Carolina on August 16 outlining her vision for the American economy, including tax policy, and has continued to develop the theme in subsequent speeches, writes Forbes.

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Tax incentives for housing developers

Harris stressed the urgency of addressing the nation’s housing crisis. As one method, she proposed a new tax credit for homebuilders that would incentivize the construction of “starter homes” — thereby encouraging first-time homeowners. She proposed expanding an existing tax credit for developers building affordable rental housing to slow the rise in rental costs.

Tax credits for renters

During her 2020 presidential campaign, then-Senator Harris introduced the Rent Relief Act, which would have provided a tax credit to people making less than $100 a year who spend more than 000% of their income on rent and utilities. If Harris wins the presidency, she could continue to champion policies that reduce the tax burden on struggling renters.

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Unrealized Capital Gains Tax

One of Biden's ideas was a tax on unrealized capital gains for taxpayers with a net worth of over $100 million. The idea is to tax money that a person hasn't actually held in their hands. For example, if you own real estate or stocks, and they go up in value over the year, you now have to pay 25% tax on that increase, even if you never sold the property or stocks. If the stocks go down again next year, well, tough luck, but you won't get your taxes back.

The proposal, which some experts have found highly controversial, was recently approved as part of Harris's tax agenda. It has drawn criticism from politicians in the rival party. Supporters of the tax argue that it targets the very wealthy Americans who have previously taken advantage of the absence of the tax to receive a lower effective rate than low-income taxpayers.

Opponents of the measure say it will stifle economic growth in the country.

Higher rates - up to 39,6%

Like President Biden, Vice President Harris wants to increase the top marginal income tax rate on the top 1% of earners to 37% from the current 39,6%. In 2019, Harris proposed a 4% levy, called an “income-based premium,” targeting households with annual incomes over $100 to fund Medicare for All. However, that idea is unlikely to move forward now, given the vice president’s recent commitment to avoid raising taxes on those making up to $000 a year. Still, there’s a possibility of an alternative proposal.

Higher property taxes

During her 2020 presidential campaign, then-Senator Kamala Harris proposed increasing estate tax revenue to support education initiatives. While the details weren’t fully laid out, it likely involved cutting the current generous estate and gift tax exemptions. Beginning in 2024, individuals can exempt up to $13,61 million in real estate from federal estate and gift taxes, and married couples can exempt up to $27,22 million. But even without Harris and Congress’s intervention, those exemptions are set to shrink from $13,61 million to $5,6 million after Dec. 31, 2025.

LIFT for the middle class

Refundable tax credits can be thought of as a form of cash distribution, and they are attractive to low- and middle-income taxpayers. During her 2020 campaign, Harris introduced the Livable Incomes for Families Today (LIFT) Middle Class Act. The proposal would provide a refundable tax credit of $3000 for single filers or $6000 for joint filers. The credit would be available to individuals with annual incomes of less than $50 or couples with incomes of less than $000.

To fund the initiative, Harris proposed a new levy on large financial institutions (those with consolidated assets exceeding $50 billion) and a partial repeal of the Tax Cuts and Jobs Act, the Trump administration's tax reform that cut tax rates for a wide range of individuals and businesses.

Child Tax Credit

Harris has pledged to restore the $3600 child tax credit created in the midst of the COVID-19 pandemic, and to create a new $6000 tax credit for children under one year old. Both credits would be offered to middle- and low-income families in the hopes that they could help lift millions of children out of poverty. But the proposal comes with a hefty price tag: $1,6 trillion over 10 years, according to the nonpartisan Tax Foundation. ПRome. ed.). In addition, Republican opposition in the Senate will likely make passing such legislation even more difficult.

Earned Income Tax Credit

Low-income workers who don't claim children on their tax returns could take advantage of Harris's proposal to expand the earned income tax credit. It would provide a tax break of up to $1500 below a certain income level. Both single taxpayers and childless couples would benefit.

A promise for families with an annual income of up to $400 000

Harris echoed President Biden's standing promise not to raise taxes on households making $400 or more a year. To fund that promise, she backed raising taxes on higher-income earners.

No tax on tips

Harris has publicly supported Trump’s proposal to eliminate the tip tax on service workers. That certainly sounds appealing to workers who rely heavily on those tips. But it’s unclear how employers might respond to such a policy change — perhaps by lowering wages to balance the tax revenue.

Corporate Tax and Offshore Income

The corporate tax rate was cut from 35% to 21% in 2018 during President Trump’s tenure. Although President Biden has promised to raise it, and the administration’s most recent budget proposed a 28% rate, no changes were made. Now, the Harris campaign has reiterated its support for the 28% rate, which is in line with Biden’s vision. That’s down from the 35% rate that was in place before Trump, but analysts at the Committee for a Responsible Federal Budget estimate that Harris’s proposed increase could reduce the U.S. deficit by more than $1 trillion over a decade.

Harris has proposed, among other things, eliminating foreign tax havens by applying the same tax rate to offshore corporate income as to domestic income. While these proposals are likely to face significant resistance in Congress, they signal a tough stance against corporations and individuals seeking tax benefits through alternative organizational structures.

Taxation of stock trading

In 2019, while promoting her Medicare for All plan, then-Senator Kamala Harris proposed a new financial transaction tax. It would impose levies of 0,2% on stock trading, 0,1% on bond trading, and 0,002% on derivatives transactions. Harris pitched it as an alternative to Senator Bernie Sanders’s proposal for a 4% income-based premium on households earning more than $29, which she believed would unduly burden the middle class. Harris estimated that this financial transaction tax, combined with her proposal to tax offshore corporate income, could generate more than $000 trillion over a decade. She argued that this would be enough to fund Medicare for All without having to raise taxes on middle-class households.

Carbon Tax

A supporter of the Green New Deal, Harris has touted a variety of progressive reforms to address the climate crisis. One such idea was a carbon tax, which she proposed during her 2020 campaign. It would essentially tax firms proportionally to the amount of greenhouse gases they emit.

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Repression of pharmaceutical taxes

Kamala Harris’s 2020 campaign platform advocated for tighter price regulation on some prescription drugs. In terms of taxation, she proposed a 100 percent levy on drug company profits earned from selling drugs at prices higher than the average cost in other high-income countries. The proposal was intended to discourage excessive price increases and potentially create a revenue stream to fund government initiatives in health care, addiction treatment, and related areas. However, it could significantly impact drugmakers’ bottom lines.

Harris supported legislation to eliminate tax deductions previously available to drug companies for direct-to-consumer advertising. (Tax deductions available to pharmaceutical companies for advertising, represent a tax-deductible option for marketing and advertising expenses. This means that pharmaceutical companies can reduce their tax liability by deducting the costs of advertising campaigns such as television commercials, print ads, online advertising, and other marketing activities aimed at promoting their products. ПRome. ed.)

Many of Harris' Democratic colleagues view the deduction as an unfair benefit to drug companies that should not be funded by the same taxpayers who can barely afford their products.

As Election Day approaches, Harris' tax agenda could continue to shape up, with other progressive proposals likely to be included.

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