Major Tax Proposals of Vice President Kamala Harris: A Comprehensive Overview
As we approach the November election, we thought we should take a closer look at the major tax proposals of Vice President Kamala Harris. These proposals aim to reshape the tax landscape for individuals, businesses, and estates. Here’s a detailed overview of her major tax initiatives:
Please remember that these are merely proposals and are not law but is intended to provide better insight into how future tax policy may be shaped under a Harris administration.
Income Tax Proposals for Individuals
Top Marginal Tax Rate Increase:
Harris proposes raising the top marginal income tax rate on the highest earners to 39.6%1. This targets the top 1% of income earners, aligning with her goal to ensure the wealthy contribute a fair share.
Income-Based Premium:
A 4% income-based premium on households earning more than $100,000 annually is proposed to fund her version of “Medicare for All”1.
Refundable Tax Credits:
Harris plans to introduce a $3,000 refundable tax credit for low- and middle-income taxpayers, which increases to $6,000 for married couples filing jointly1. This is part of her LIFT Act aimed at providing financial relief to working families.
Capital Gains Tax:
She suggests taxing capital gains at ordinary income tax rates, though specifics on the subset of taxpayers affected remain unclear1.
Income Tax Proposals for Businesses
Corporate Tax Rate:
Harris proposes increasing the corporate income tax rate from 21% to 35%. This significant hike aims to ensure that corporations contribute more to federal revenues.
Financial Transaction Tax:
A financial transaction tax (FTT) is also on the table, with a 0.2% tax on stock trades, 0.1% on bond trades, and 0.002% on derivative transactions. This measure is designed to curb speculative trading and generate additional revenue.
Estate Tax Proposals
Estate Tax Exemption:
Harris plans to lower the estate and gift tax exemption to $3.5 million, reverting to the 2009 level2. This change would increase the number of estates subject to taxation.
Estate Tax Rates:
The proposed estate tax rates are set to increase significantly:55% for taxable estates up to $13 million60% for taxable estates over $13 million but not exceeding $93 million65% for taxable estates exceeding $93 million
Elimination of establishing future grantor trusts to freeze estate values.
Annual Exclusion and Surtax:
The annual exclusion for gifts would be limited to $10,000 per donee, with an overall cap of $20,000 per donor. Additionally, a 10% surtax would be imposed on estates over $1 billion.
Conclusion
Vice President Harris’s tax proposals reflect a commitment to increasing tax equity and funding social programs. By targeting high earners, large corporations, and substantial estates, her plan aims to generate significant revenue while addressing income inequality. As these proposals evolve, they will undoubtedly shape the discourse on tax policy in the upcoming election.
We will continue to monitor the changes in tax law as we move past the election and the expiration of the TCJA. Please let us know if have any questions regarding these proposals or our view of how tax policy will take shape in the coming year.