Kamala Harris’s Tax Plans: What You Need to Know Ahead of the Election

With the upcoming election just around the corner, Kamala Harris has unveiled her tax plans, which promise significant changes for both individuals and businesses. Here’s a comprehensive look at what her proposals entail and how they might impact you.

Key Takeaways

• Tax hikes for high-income individuals
• Tax breaks for families, first-time homebuyers, and tipped workers
• Increased corporate tax rates
• New tax credits for home builders and green energy initiatives

Tax Plans for High-Income Individuals

Kamala Harris’s tax proposals include several measures aimed at increasing taxes for high-income earners:

• Income Tax Rate: Reinstating the top 39.6% income tax rate for individuals earning $400,000 or more.
• Net Investment Income Surtax: Increasing the 3.8% surtax to 5% for high-income individuals.
• Capital Gains Tax: Nearly doubling the long-term capital gains tax rate for the wealthy, taxing gains at ordinary income rates up to 39.6% (44.6% with the surtax).
• Tax on Unrealized Gains: Proposing to tax unrealized gains upon death, treating it as a realization event for income tax purposes.
• Minimum Income Tax: Introducing a 25% minimum income tax on individuals with at least $100 million in wealth.

Tax Plans for Other Individuals

Harris’s tax plans also include several benefits for families, first-time homebuyers, and tipped workers:

• Child Tax Credit: Bringing back the 2021 expansions, increasing the credit to $3,600 per child and introducing a one-time $6,000 credit for the first year of a child’s life.
• First-Time Homebuyers: Offering a tax credit of up to $10,000 for eligible first-time homebuyers.
• Obamacare Subsidies: Extending the expansions to Obamacare subsidies, allowing more people to get credits for buying health insurance through the marketplace.
• Earned Income Tax Credit: Allowing childless workers to claim a higher earned income tax credit (EITC).
• Tipped Income: Making tipped income tax-free for workers in the hospitality and service industries.

Business Tax Plans

Harris’s proposals also target businesses, with both tax hikes and new credits:

• Corporate Tax Rate: Raising the current 21% corporate tax rate to 28%.
• Alternative Minimum Tax: Increasing the 15% alternative minimum tax on very large corporations to 21%.
• Excise Tax on Stock Buybacks: Quadrupling the existing 1% excise tax on stock buybacks by publicly held corporations.
• Eliminating Loopholes: Doing away with various business deductions considered as tax loopholes for the rich.
• New Tax Credits: Introducing a new tax credit for home builders who sell starter homes to first-time homebuyers and increasing incentives for builders of affordable rental units.
• Green Energy Subsidies: Working to maintain green-energy tax subsidies for individuals and businesses enacted in the 2021 Inflation Reduction Act.

Kamala Harris’s tax plans are comprehensive and aim to address various economic disparities while also promoting green energy and affordable housing. As the election approaches, these proposals will undoubtedly be a focal point of her campaign.

Sources

• What Would Kamala Harris’s Tax Plans Mean For You? | Kiplinger, Kiplinger.