2024 Election: Kamala Harris Tax Plan

If Kamala Harris becomes president, her proposed tax changes would primarily focus on increasing taxes on wealthy individuals and corporations while offering benefits to middle- and lower-income Americans. Here’s a detailed look at what her tax plan could entail:

For High-Income Individuals:

1. Increased Top Income Tax Rate: Harris would restore the top income tax rate to 39.6% for those earning more than $400,000 annually, up from the current 37%​.

   
   

2. Net Investment Income Surtax (NIIT): The current 3.8% surtax on net investment income would be raised to 5% for high earners​.

   
   

3. Capital Gains Taxation: Long-term capital gains would be taxed at 28% for those with income exceeding $1 million, plus the NIIT, bringing the effective rate to 33%. This is a significant increase from the current 20% rate​.

   
   

4. Wealth Tax: A minimum 25% tax on the ultra-wealthy, defined as individuals with at least $100 million in wealth, would include unrealized gains, which means the gain on assets that have not yet been sold would also be subject to tax.

   
   

   This tax change seems to be the biggest issue online for most taxpayers. A tax on unrealized gains is a very controversial topic and more than likely be the most difficult tax change to get passed.

   
   

Corporate Tax Changes:

1. Corporate Tax Rate: Harris wants to increase the corporate tax rate from 21% to 28%, reversing some of the cuts made in 2017.

   
   

2. Stock Buyback Tax: She proposes raising the stock buyback tax from 1% to 4% for publicly held corporations.

   
   

3. Alternative Minimum Tax: She supports increasing the alternative minimum tax on large corporations from 15% to 21%, ensuring that companies with high profits pay a base level of taxes.

   
   

Financial Transaction Tax:

Harris’s plan also includes imposing a financial transaction tax on Wall Street trades: 0.2% on stock trades, 0.1% on bond trades, and 0.002% on derivative transactions​.

Middle-Class and Low-Income Benefits:

1. Expanded Child Tax Credit: Harris supports reinstating the expanded Child Tax Credit of $3,600 for children under six and $3,000 for older children and adding a one-time $6,000 child tax credit for the first year of a baby’s life.

   
   

2. Earned Income Tax Credit (EITC): For childless workers, she would increase the maximum credit from $600 to $1,500 and broaden eligibility.

   
   

3. Housing Tax Credits: Harris proposes a $10,000 first-time homebuyer tax credit, downpayment assistance up to $25,000, and other credits to boost affordable housing construction​.

   
   

Business Tax Proposals:

1. Startup Cost Deductions: She wants to expand the current startup cost deduction from $5,000 to $50,000 to incentivize small business creation.

   
   

2. Simplified Filing: She has hinted at creating a standard deduction for small businesses to streamline tax filing.

   
   

Focus on Economic Equality:

Harris’s tax plan emphasizes narrowing the gap between high and low earners. By targeting higher taxes on wealth and income, she aims to fund expansions in social programs, housing assistance, and child tax credits, which would significantly benefit middle- and lower-income households​.

Overall, Kamala Harris’s proposed tax changes build on the Biden administration's policies but go further in raising taxes on the wealthy and corporations while providing targeted relief to low- and middle-income Americans.

If you have any questions on how Kamala Harris' tax changes could affect you or your business, then please call Turner Business Solutions at (316) 281-0125 or schedule a free consultation online