Vice President Kamala Harris said she aims to increase the top capital gains rate less aggressively than Joe Biden has advocated, a notable break from the retiring president’s tax policy agenda.
She revealed the change during a Wednesday rally in New Hampshire, calling for a tax rate of 28%.
“We will tax capital gains at a rate that rewards investment in America’s innovators, founders, and small businesses,” she said. “So here’s the detail: If you earn a million dollars a year or more, the tax rate on your long-term capital gains will be 28%.”
The current rate for the highest earners is 20%. When a 3.8% Obamacare investment tax for top earners is included, the rate is 23.8%. Harris is now pushing for that to be raised to 5%, sources told the Wall Street Journal, meaning that the all-in rate would be 33%. That is well below the 44.6% rate that Biden had sought.
“My plan will make our tax code more fair, while also prioritizing investment and innovation,” Harris told the crowd. “So let us be clear, billionaires and big corporations must pay their fair share in taxes.”
The capital gains rate is the tax rate that investments such as stocks are taxed upon when that investment is realized — meaning when it is sold.
The change in policy is notable as Harris has tried to present herself as more centrist on some issues than she has been in the past. Still, she has embraced many of Biden’s economic and tax proposals, which are outlined annually in the White House budget, essentially a wish list of priorities.
Harris has reversed her support for a number of more left-liberal policies that she supported during her tenure as a senator from California and from when she first ran to the left of Biden during the 2020 Democratic presidential primaries.
For instance, her campaign told the Washington Examiner in July that she no longer supports a federal job guarantee, something that many proponents of a Green New Deal have pushed for. She has also reversed course on eliminating private healthcare plans as part of a Medicare for All plan and banning fracking.
Specifically, on the tax and spending front, she and her campaign have been a bit vague. Ahead of the Wednesday announcement about the lower capital gains proposal, Harris campaign officials said she supports all of the revenue raisers in Biden’s budget that “ensure billionaires and big corporations pay their fair share.”
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Also at the Wednesday event in New Hampshire, Harris endorsed a tenfold expansion of the small business tax deduction for startup expenses, increasing it from $5,000 to $50,000.
“My plan will help existing small businesses grow,” Harris said at the rally. “We will provide low- and no-interest loans to small businesses that want to expand. And we will, and this is very important, cut the red tape that can make starting and growing a small business more difficult than it needs to be.”