U.S. Vice President Kamala Harris has recently unveiled an ambitious array of economic initiatives aimed at alleviating the financial burdens faced by middle and lower-income Americans, while also stimulating overall economic growth. These proposals largely build upon President Joe Biden’s economic framework but seek to expand their reach and effectiveness.
Harris has reiterated Biden’s commitment not to impose increased taxes on households earning under $400,000 annually. She supports a significant portion of the proposed $5 trillion tax increases outlined in Biden’s fiscal 2025 budget, which includes a hike in the top income tax rate from 37% to 39.6%. This plan introduces a new 25% minimum tax on individuals with net worths exceeding $100 million, which also encompasses unrealized capital gains. For households with incomes surpassing $1 million, Harris suggests elevating the long-term capital gains tax from 20% to 28%. This increment is noticeably less than the full 39.6% rate advocated by Biden.
In her overhaul of corporate taxation, Harris intends to raise the corporate tax rate to 28%, a move that would partially reverse the tax cuts established under former President Donald Trump’s tax legislation of 2017, which lowered the rate from 35% to 21%. Despite potential resistance from corporate sectors, analysts predict this change could garner an additional $1 trillion for government coffers over the next decade.
Harris aims to permanently reinstate the expanded Child Tax Credit initiated during the COVID-19 pandemic, increasing it to $3,600 per child from the current $2,000, which is set to decrease to $1,000 in 2026. In addition, a new proposal of a $6,000 one-time bonus credit is on the table for families welcoming newborns.
On the topic of affordable housing, Harris has presented an actionable plan designed to stimulate new construction and reduce costs for both renters and buyers. Key initiatives include offering tax incentives to builders focusing on affordable rental units and first-time homebuyers, alongside a notable $25,000 tax credit to assist new buyers with down payments for the next four years. Moreover, she proposes a substantial $40 billion “innovation fund” encouraging local governments to prioritize affordable housing initiatives.
Acknowledging the current housing crisis—evidenced by a 50% increase in home prices and a 35% rise in rents over the past five years—Harris has ambitiously aimed to facilitate the construction of 3 million housing units within a four-year timeframe.
In a notable departure from existing proposals, Harris has also suggested the implementation of a new tax deduction of up to $50,000 specifically for small business startup costs. This policy is designed to fuel entrepreneurship and create a clear contrast with previous tax cuts favoring larger corporations, as small businesses have been pivotal in generating 70% of net new jobs since 2019.
Addressing childcare concerns, Harris articulated her ambition for no working family to spend more than 7% of their income on childcare costs—currently averaging over 19% of median family income per child. This concept aligns with her support for the Child Care and Development Block Grant program, which currently assists around 1 million children from low-income families.
Finally, in response to rising grocery prices, Harris has committed to instituting an unprecedented federal ban on price gouging in the food and grocery sectors. This measure aims to curtail excessive pricing practices employed by corporations that exploit consumers amid soaring costs.
These proposals symbolize Harris’ commitment to enacting progressive economic reforms, prioritizing the welfare of everyday Americans. As these plans unfold, they aim to bolster economic resilience while fostering a more equitable society.