Vice President Kamala Harris has proposed cutting the Joe Biden capital gains tax pegged at 39.6% to 28%. Harris announced this Wednesday at a North Hampton, New Hampshire rally. This proposal applies largely to households with a net annual income of $1 million and above. The Wall Street Journal first reported the proposed fiscal policy by the Democratic presidential candidate.
Harris is sprinting alongside Biden with the intent of receiving the presidential baton. However, some of her economic proposals are starting to deviate from the Democratic norm. Harris revealed that she may not entirely agree with Biden’s tax plan for capital gains. During the Wednesday New Hampshire rally, Harris said, “We will tax capital gains at a rate that rewards investment in America’s innovators, founders, and small businesses.”
Harris is obviously trying to win over business leaders, entrepreneurs, investors, and founders with her progressive economic plans. For the 2024 fiscal year, the long-term capital gains tax and tax on assets held for over a year stand at 20%. However, President Biden has proposed to raise that figure to 39.6% in the 2025 fiscal budget. So, Harris’s proposal to reduce the Biden capital gains tax hike is a bold departure from her current boss’s economic leanings.
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A Long-Term Capital Gains Tax Proposal
Before reviewing the Biden capital gains tax, Harris had largely been in alignment with the president’s economic proposals. However, strategists of the new Democratic candidate seem to be urging her to bring some gourmet policies to the table.
For example, Kamala Harris obviously has huge spending plans based on what she’s shared so far in her campaigns. So, she naturally aligned with Biden’s tax increases and his aggressive drive to milk big corporations. However, Harris is rethinking her economic goals after receiving widespread pushback, even by some of her cronies, for the corporate pressure campaign.
In a recent interview, Democrat compatriot Rep. Ro Khanna from California criticized Harris’s alignment with Biden’s aggressive corporate tax policies. Khanna said, “I don’t think a blanket tax on unrealized gains is a good thing.” Khanna’s quoted statement refers to the taxation of the potential gains on an asset, a policy favored by the Biden administration. However, this policy applies to households worth $100 million and above, and Harris has so far maintained a blithe poise about it. One of the concerns that Khanna raised about this tax on unrealized capital gains is that it may stunt the growth of businesses, startups particularly.
Economic analysts posit that Harris is apprehensive of Biden’s capital gains tax proposal. If and when Biden signs a 39.6% capital gains tax into law, the country’s ultra-rich may see it as a subtle ploy to tax the wealthy.
Economic Plans Targeted at Helping Businesses
In the past few weeks, the Harris campaign train has strived to place the Democratic candidate in good standing with corporate America. Her economic proposals aim to bring more impoverished Americans to the middle class by wielding the stick and carrot before large corporations.
The business exploits of Republican Donald Trump have been a strong point for him. Indeed, the former president often boasts that he holds the better credentials to rein the US economy. Trump took to Truth Social during Harris’s Wednesday rally to rail at the Democrat’s economic proposals. He wrote, “Trump cash versus Kamala crash. We’re going to have a crash like 1929 if she gets in. It will not be pretty.”
Kamala Harris and Donald Trump are billed to face off on September 10 at a presidential debate hosted by ABC News. We reckon the vice president has boarded herself up to receive serious shellings from Trump on the economic front.
ALSO READ: Harris Advocates for Expanded Child Tax Credit of Up to $6,000 for Families with Newborns
Startup Expenses
To tell off naysayers who have claimed Harris is plagued with economic ineptitude, the vice president is rolling out more progressive economic proposals to silence critics. For example, she also proposed a $50,000 tax deduction to serve as a startup expense for small businesses. The applicable amount under the Biden administration is about $10,000. Similar to the Biden capital gains tax rate, small business policies are another economic front on which Harris dissents.
During a CNN interview, Shark Tank star Kevin O’Leary reacted to Harris’s tax deduction proposal. The billionaire said it is plausible that small businesses have come on the democratic candidate’s economic radar. However, O’Leary said it’s been a long time coming, taking a dig at the Biden administration’s neglect of small businesses. This infers that the business magnate thinks the Biden unrealized capital gains tax should not be the economic priority. Also, the serial businessman explained that “$50K is a drop in the bucket,” citing other burdens that small businesses have to shoulder.
In addition, O’Leary decried how these small businesses’ investment returns often pale compared to the state-based costs they usually incur. He proceeded to cite California as an example, stating that startups have unhealthy regulations and wage mandates levied against them in the state. So, O’Leary affirmed that if Harris would do anything to cut small businesses some slack, she needs to start with state regulations.
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